Posted on Tuesday, December 22, 2020

On December 22, the Securities and Exchange Commission (SEC) published Rule 144 Holding Period and Form 144 Filings, which proposes to change the securities holding period start time and to mandate the electronic filing of Form 144 for securities subject to Exchange Act reporting requirements. The section of the proposal on Format requirements, states:

While the proposed rule does not expressly prescribe a specific format for Form 144 that would be required for filing in EDGAR, Form 144 would be made available as an online fillable form, similar to other fillable forms such as Forms D, 3, 4, and 5. 

As an alternative, we could require Form 144 to be filed in the Inline eXtensible Business Reporting Language (“Inline XBRL”) format, a derivation of XML that is designed for financial reporting and is both machine-readable and human-readable. Compared to the proposal, the Inline XBRL alternative for Form 144 would provide more sophisticated validation, presentation, and reference features for filers and data users. However, the Inline XBRL alternative would also impose initial implementation costs (e.g., learning how to prepare filings in Inline XBRL, licensing Inline XBRL filing preparation software) upon filers that do not have prior experience structuring data in the Inline XBRL format. By contrast, because the proposal would allow filers to submit Form 144 using an online fillable Form, filers that lack experience structuring data in a custom XML format would not incur implementation costs.

The proposal asks for comment on whether electronic filing, as proposed, should be mandatory; and if alternative methods, such as Inline XBRL should be considered. Comments are due by March 22, 2021.

Read the proposal.