The Commission also requests comment on the possibility of limiting file size and type of graphic and image material it will accept out of concern about the potential size of data files. As we have previously suggested, to solve storage problems, the Commission should consider alternative methods of filing. Limitation on Hypertext Links One of the Web's greatest attributes is the ability to link to obtain further information. We understand the Commission's current hesitation to permit external hyperlinks, but suggest that additional consideration be given to this issue. We note that the Commission has permitted issuers to include their web site address in prospectuses and reports.
Hyperlinks also brings practice in line with theory when it comes to incorporation by reference.
In theory, certain information is not required to be repeated in Commission filings because it has already been filed and digested by the market. Even today, they must sift through various filings to find the incorporated information. However, with the addition of hyperlinks, investors will be able to directly access the incorporated information. Accordingly, we believe it would be appropriate for the Commission to revisit the use of incorporation by reference in light of the capability provided by hyperlinks. If the Commission were to permit hyperlinked documents to meet substantive disclosure requirements, we would not object to the liability for such documents proposed in the Release.