SEC launches re-examination of the way regulated entities report

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09 Jul 2008

The US Securities and Exchange Commission has launched an 'ambitious effort' to examine to examine how the SEC acquires information from public companies, mutual funds, brokers, and other regulated entities, and how it makes that information available to investors and the markets.

They are calling the project the 21st Century Disclosure Initiative. The first phase of the study will be to outline the attributes of the disclosure system for a future that incorporates technology, the new ways in which investors get their information, and recent developments in how companies compile and report the information in their SEC-mandated disclosures. That phase will be completed by the end of 2008, when a follow-on advisory committee will be appointed to consider the questions in more detailed fashion through a public and consultative process. Click for SEC Announcement (PDF 28k).

21st Century Disclosure Initiative

The study will be a fundamental rethinking of financial disclosure, beginning with the basic purposes of disclosure from the perspective of investors and markets. The inquiry will be aimed at identifying the objectives of the ideal disclosure system at the architectural level. Essential to the study will be the determination of how to match the capabilities of today's information technology with the SEC's regulatory aims and the needs of investors.

The study will include a review of all existing SEC forms and reporting requirements, as well as the manner in which information is provided to the Commission, with a special focus on needless redundancy. It will also include consideration of various alternative strategic approaches to acquiring and publishing disclosure information. In addition, the study will consider ways that regulatory requirements for the collection of information might be tailored to get the best real-time distribution of financial and narrative disclosure to investors. Finally, the study will examine how best to integrate public disclosure with the SEC's proposed new post-EDGAR architecture for investor search, assembly, and comparison of data.


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