Summary
Effective Jan. 1, 2023, Variable Product issuers of actively sold contracts are now required to file registration statements and definitive updates using Inline XBRL (iXBRL). It is vital to have the right tools and the right partners to ease the transition and ensure submissions are accurate and in compliance. Toppan Merrill has been working with client supplied, preformatted EDGAR files for 1940 Act filers since the inception of XBRL in 2011.
Background
For decades the SEC has sought to harness technology to provide a mechanism for allowing investors, Commission staff, data aggregators, financial analysts and other data users to efficiently analyze and compare available information, as required by their particular needs and circumstances.
On March 11, 2020, the SEC adopted the new rule, Updated Disclosure Requirements and Summary Prospectus for Variable Annuity and Variable Life Insurance Contracts, more commonly referred to as Rule 498A. The rule mandates, beginning Jan. 1, 2023, Variable Product issuers of actively sold contracts are required to file registration statements and definitive updates using Inline XBRL (iXBRL).
The iXBRL filing format, which brings together both the human-readable and machine-readable formats, is the mandated standard required for funds and operating companies. Inline XBRL incorporates XBRL tags directly into the HTML-formatted document.
By combining the HTML and XBRL, iXBRL gives control of the presentation and formatting of the content to the filer, while keeping the data machine-readable.
iXBRL provides a streamlined review process which saves time and money and eliminates the risk of having differences between the HTML and XBRL exhibits.
To be in compliance, Variable Product issuers of contracts being sold to new investors, are required to submit in iXBRL format in a framework similar to that for Mutual Funds and ETFs as follows:
- Post-effective amendments filed pursuant to paragraph (b)(1)(i), (ii), (v), or (vii) of Rule 485, and in the case of registrants on Forms N-4 or N-6, paragraph (b)(1)(vi) of Rule 485, iXBRL must be filed either concurrently with the filing or in a subsequent amendment that is filed on or before the date that the post-effective amendment that contains the related information becomes effective;
- Initial registration statements and post-effective amendments filed other than pursuant to paragraph (b)(1)(i), (ii), (v), or (vii) of Rule 485, and in the case of registrants on Forms N-4 or N-6, paragraph (b)(1)(vi) of Rule 485, iXBRL must be filed in a subsequent amendment on or before the date the registration statement or post-effective amendment that contains the related information becomes effective; and
- Any form of prospectus filed pursuant to Rule 497(c) or (e), iXBRL must be submitted concurrently with the filing.
With the Jan. 1, 2023 transition to Inline XBRL (iXBRL), a compressed timeline for EDGAR submission review will be realized for first time XBRL filers. It is vital to have the right tools and right partners to ease the transition. Although there are content creation solutions being used today, a user-friendly workflow to generate the XBRL remains elusive for most filers.
Toppan Merrill has been in the forefront of developing iXBRL filing solutions and working with clients to support SEC filing requirements since the inception of XBRL. Open and Closed End Mutual Funds utilize Toppan Merrill’s SaaS platforms and experienced service team to seamlessly meet their iXBRL filing requirements. Whether managing the full document lifecycle from first draft to EDGAR/iXBRL filing; or working with client supplied, preformatted EDGAR files to be iXBRL compliant, clients reply on Toppan Merrill to deliver accurate and on-time SEC submissions.
Contact us via [email protected] or by phone at 800.688.4400, to learn more about this new iXBRL requirement for Variable Product issuers and how our extensive XBRL experience will support your filing requirements.
Guy Stanzione – Compliance Services Director and Product Manager
Guy Stanzione provides deep insight on the Securities Act of 1933, the Investment Company Act of 1940 and SEC regulatory compliance, as well as investment company solutions for regulatory document preparation, filing and distribution. Leveraging more than 40 years of financial services, shareholder communication, printing and compliance service expertise he is a vital resource for financial services professionals navigating the complexities and pace of SEC regulatory changes.
