EDGAR is a online or Electronic financial reporting platform which has been created by the United States Securities and Exchange Commission to automate the filing of Annual and Quarterly Reports. This platform allows companies to electronically submit their filings and thereby eliminating the hardcopy paper filings. All domestic and foreign public companies have to file their forms through EDGAR Platform.
Companies have to file several forms to SEC such as,
Section 16 Filings – 3, 4 and 5
10-Q – Quarterly Report filed for each quarter
10-K – Annual Report filed for every year
20F – Annual and transition report given by foreign private issuers
40F – Annual reports filed by Canadian issuers
6K – Current report of a foreign issuer
8K – Events or Changes occurred Between Quarterly Reports
S-1,- IPO Registration
S-3 – Registration statement for specified transactions by certain issuers
POS AM – Post-effective amendment to a registration statement that is not immediately effective upon filing,
424B – Prospectus
RRS – Mutual Find
CIK – It stands for Central Index Key. It is unique identification number which is given to the filers of SEC which is used to index and map all the filings done by a particular filer. With CIK one can also access all the filings done by a particular filer.
These forms have to be filed in HTML Format and it has to be converted into appropriate formats before filing it to the SEC. Around 3,000 filings are done on EDGAR platform on daily basis and 12 Million filings are stored in the SEC Database. Some forms have to be filed in XBRL format which is Extensible Business Reporting Language and it comes in XML format.
These document conversions are generally carried out by SEC Filing Agents or external Filing services provider who provide the EDGAR conversion and filing services to public companies, particularly small and medium scale public companies. For each Quarter these documents have to be filed to the SEC.
For Xbrl, Tagging of data should be done and the taxonomies have been provided by the SEC.
Some companies also use the Custom tags to define their fields. These tags are helpful in identifying the fraudulent activities in the filings.
The EDGAR system performs the following operations automatically:
- Collection of documents
- Validating the submitted documents
- Indexing the documents
- Acceptance and forwarding of documents
Now, the EDGAR Database has got huge wealth of information regarding Public Companies and it is completely available to the general public for usage and it has got the details of all Public Companies.
Through this platform people can view the annual filings of the companies to make certain investment decisions. It also reveals the financial health of the organization, its profitability and losses and other stakeholders information.
This is vital for investment firms to make certain investment decisions and also it gives a clear transparency in financial reporting to general public and increases the confidence among investors which is very vital to maintain the Stock Market sentiments.
Financial Analysts widely use this information to make a detailed analysis and forecast the Financial market movements
Hence EDGAR system played a vital role in transforming the filing process required by the U.S. Law and also increasing the trust among investors by making the filings available for public access.