Do Firms' Comply with the Shorter Form 8-K Reporting Deadlines? Initial Evidence on the Effectiveness of the SEC's 2004 Current Report Rule
Abstract
When examining Form 8-K filings under the Securities and Exchange Commissions' (SEC) Rule 10b-5, Carter and Soo (1999) found that over 26% are filed after the statutory due date. "Bad news" filings resulted in over 30% tardiness. Effective August 23, 2004, the SEC passed the Additional Form 8-K Disclosure and Acceleration of Filing Date Rule (henceforth, the 2004 Current Report Rule), which expanded the number of disclosures required to be submitted on the Form 8-K, while decreasing the reporting deadline from 15 calendar days (for most events) to only four business days after event occurrence. Consequently, the purpose of this paper is to assess the immediate compliance behavior of firms, consequent to the passage of the 2004 Current Report Rule (CRR).
In order to examine immediate effects, our sample consists of 2004 fourth quarter Form 8-K filings. Results indicate that compliance with stated Form 8-K deadlines has significantly improved. Relative to the other events examined, Form 8-K filings are more likely to be late if they report director resignations (i.e. "bad news"). Other results indicate no discernable differences between the number of days to file within the four day requirement and no industry is more likely than another to be noncompliant. In sum, this paper's findings should be of interest to the SEC, because they support the SEC's policy (i.e. the 2004 CRR) of firms providing material information to investors in a more timely fashion.
