April 14, 1994
TO: ACCOUNTING/TREASURERS COMMITTEE NO. 17-94
SEC RULES COMMITTEE NO. 46-94
RE: INSTITUTE LETTER HIGHLIGHTING EDGAR FILER PROBLEMS
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The Institute recently conducted a review of the electronic
filing experience of several of its member firms who have been
phased-in to the EDGAR system. This review revealed that the EDGAR
system is functioning well. Member firms that have been phased-in
to EDGAR generally report a smooth transition from paper to
electronic filings.
Nevertheless, the review revealed several technical problems
which are addressed in the attached letter to the SEC. The
electronic filing problems reported by EDGAR filers relate to: a)
file transmission speed, b) identification codes and c) timeliness
of acceptance/suspension notices. The Institute's letter expresses
support for the concept of electronic filing and requests that each
of these problems be addressed.
File Transmission Speed
The EDGAR system is designed to accommodate file transmission
speeds of up to 9600 baud. File transmission speed tests conducted
by several member firms indicate that actual transmission speeds
range from 3900 baud to 7000 baud. As a result, transmission time
per filing and telephone connect time charges are greater than they
should be. The Institute's letter requests the SEC to make
modifications that would enable the system to accommodate 9600 baud
transmissions. In addition, the letter suggests that the
Commission consider enhancing the EDGAR system to accommodate file
transmission speeds of 14400 baud or higher.
Identification Codes
The EDGAR system uses a series of identification codes to
authenticate electronic filings. The Central Index Key ("CIK"), a
unique ten digit number, and the CIK Confirmation Code ("CCC"), an
eight character identifier, must be included in each electronic
filing. EDGAR filers indicate that their filings have been
rejected due to a "mismatch" between the CIK and the CCC. Rejected
filings cannot be processed until the filer obtains a new CCC.
New funds sponsored by an investment company complex that has
already been phased-in to EDGAR are required to file their initial
registration statement electronically. The new fund must apply to
the Commission for identification codes prior to its initial
filing. EDGAR filers indicate that the initial registration
statement is typically rejected. The EDGAR system indicates that
the newly organized investment company has not yet been phased-in.
Apparently, the Commission's procedure for assigning new
identification codes does not recognize that a recently organized
fund may be associated with a previously phased-in sponsor.
Timeliness of Acceptance/Suspension Notices
Electronic filers who subscribe to CompuServe are informed of
the status of their filings through the EDGAR E-Mail service.
Sometime after completion of an electronic filing, an electronic
message is sent from EDGAR to the filer's CompuServe e-mail box via
the CompuServe network. The e-mail message indicates that the
filing has been either accepted or rejected. EDGAR filers indicate
that the interval between the completion of an electronic filing
and the receipt of an acceptance/suspension notice typically is
fifteen minutes or less. However, in certain instances, the
receipt of an acceptance/suspension notice may take as long as one
hour. Further, the longest delays typically occur in connection
with those filings that are ultimately rejected.
Gregory M. Smith
Director - Operations/Compliance
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