Thank you for a good question! This topic aligns closely with CfPA's policy platform, and here is our position on the matter.

Searchable PDFs on EDGAR

In the interest of enhancing transparency and efficacy in investor due diligence, we propose a crucial amendment to the current filing requirements within the SEC EDGAR system. Specifically, we recommend the mandatory submission of searchable PDF documents, rather than the current practice of uploading flattened, non-searchable files. The inability to conduct keyword searches within lengthy offering circulars and other crucial documents not only undermines the efficiency of the investment decision process but also potentially obscures critical information necessary for a thorough evaluation. Key terms or other indicators of investment risk and opportunity must be readily findable by investors. This enhancement in document accessibility will significantly improve investors' ability to conduct comprehensive and efficient analyses, ensuring they are better informed and more equipped to make judicious investment decisions.

Background

The current practice of submitting non-searchable and non-machine-readable Form C filings from issuers and regulated investment crowdfunding portals poses significant challenges for investors conducting due diligence. This practice results from the limitations on documents that may be uploaded to EDGAR. A document that contains any links cannot be uploaded, thus issuers and their lawyers “flatten” the pdf before uploading it, resulting in a lack of searchability. This lack of searchability makes it difficult to efficiently locate and evaluate key terms or risk indicators within lengthy offering documents. Consequently, critical information may be obscured, undermining the transparency and thoroughness of the investment decision-making process. 

Requested Change

Requiring searchable PDFs (and making the changes to EDGAR necessary to allow such documents to be uploaded) will enhance document accessibility, allowing investors to perform more comprehensive and efficient analyses, thereby ensuring better-informed investment decisions. It also allows for AI-aided due diligence processes, speeding up diligence times without sacrificing quality.

Statutory Authority

This change could be accomplished under existing statutory authority.