{"id":375,"date":"2015-05-07T20:59:23","date_gmt":"2015-05-07T20:59:23","guid":{"rendered":"https:\/\/seci.wpenginepowered.com\/?p=375"},"modified":"2015-05-07T20:59:23","modified_gmt":"2015-05-07T20:59:23","slug":"the-mystery-of-filed-versus-furnished","status":"publish","type":"post","link":"https:\/\/seciblog.pli.edu\/index.php\/the-mystery-of-filed-versus-furnished\/","title":{"rendered":"The Mystery of Filed versus Furnished"},"content":{"rendered":"

In our last post we explored the difference between the Annual Report to Shareholders (ARS) and the Form 10-K. The ARS, required by the proxy rules, is an example of a document that is \u201cfurnished\u201d<\/strong> to shareholders and not actually \u201cfiled\u201d<\/strong> with the SEC.<\/p>\n

Just what does this mean?<\/p>\n

Filed versus furnished is essentially a legal distinction<\/strong>. It does not impact how information appears on the EDGAR system (as they look the same) or other practical filing issues (as they are filed in EDGAR the same way). For example, an Item 2.02 Form 8-K is a \u201cfurnished\u201d document, but an Item 2.01 Form 8-K is a \u201cfiled\u201d document. To learn what is going on with this distinction, let\u2019s explore:<\/p>\n

    \n
  1. What is the legal difference?<\/li>\n
  2. How to determine if a document is furnished or filed?<\/li>\n<\/ol>\n

    Filed<\/strong><\/p>\n

    When a document is \u201cfiled\u201d it is formally \u201cfiled\u201d with the SEC to meet the disclosure requirements under the laws the SEC administers, principally the 1933 and 1934 Acts. This means a \u201cfiled\u201d document is subject to the liability provisions<\/em><\/strong> of the Acts, and is the principal difference between filed versus furnished.<\/p>\n

    Furnished<\/strong><\/p>\n

    When a document is furnished, generally to shareholders, it is not actually filed with the SEC under one of the Acts, (even though it may be \u201cfiled\u201d in the EDGAR system) so it is not subject<\/em><\/strong> to the liability provisions of the Acts.<\/p>\n

    This liability difference can be a substantial issue. For example, it is far easier to establish scienter in a 34 Act fraud case then in a non-34 Act fraud case. Generally in a non-34 Act action, to establish scienter it must be shown that the accused deliberately set out to cause harm. In a 34 Act action, gross negligence or reckless disregard can establish scienter, a much lower level of proof.<\/p>\n

    Another difference –<\/strong> if something is furnished rather than filed, it cannot be incorporated by reference into later filings. In the shelf registration process this is very important as furnished documents are not incorporated by reference into the S-3 on the shelf, and hence do not expose the company to the strict liability standards of the 33 Act! And, if you do later incorporate a furnished document into a filed document, it loses its furnished status, usually not a good thing!<\/p>\n

    So, how do you tell if something is filed or furnished?<\/strong> When they appear on the EDGAR system they look exactly the same! As discussed earlier, it is really a legal distinction, so you go back to the legal sources, in particular, the instructions to the forms.<\/p>\n

    Here is an excerpt from the Form 8-K instructions:<\/p>\n

      \n
    1. The information in a report furnished pursuant to Item 2.02 (Results of Operations and Financial Condition) or Item 7.01 (Regulation FD Disclosure) shall not be deemed to be \u201cfiled\u201d for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, unless the registrant specifically states that the information is to be considered \u201cfiled\u201d under the Exchange Act or incorporates it by reference into a filing under the Securities Act or the Exchange Act.<\/li>\n<\/ol>\n

      So, this legal distinction is actually spelled out in the instructions.<\/strong><\/p>\n

      As a concluding thought, the most commonly encountered furnished documents are:<\/p>\n

      The Annual Report to Shareholders
      \nForm 8-K Item 2.02
      \nForm 8-K Item 7.01<\/p>\n

      There are others, so when in doubt, consult the instructions!<\/p>\n

      As a preview for our next topic in this discussion, check out the furnished versus filed status of the performance graph required by Regulation S-K Item 201(e). You may find that a surprise awaits!<\/p>\n

       <\/p>\n","protected":false},"excerpt":{"rendered":"

      In our last post we explored the difference between the Annual Report to Shareholders (ARS) and the Form 10-K. The ARS, required by the proxy rules, is an example of a document that is \u201cfurnished\u201d to shareholders and not actually \u201cfiled\u201d with the SEC. Just what does this mean? Filed versus furnished is essentially a … Continue reading The Mystery of Filed versus Furnished<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"_wpas_customize_per_network":false},"categories":[1],"tags":[39,48,32,40,58,46,42,66,4,5,43],"coauthors":[163],"class_list":["post-375","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-accountant","tag-accounting","tag-audit","tag-business","tag-finance","tag-financial","tag-financial-reporting","tag-form-8-k","tag-sec","tag-sec-reporting","tag-tax"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/posts\/375","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/comments?post=375"}],"version-history":[{"count":0,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/posts\/375\/revisions"}],"wp:attachment":[{"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/media?parent=375"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/categories?post=375"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/tags?post=375"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/coauthors?post=375"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}