SEC embraces social media

The US SEC (our JSE equivalent) announced on Tuesday late August that the format for financial statements to the regulator, Edgar, will be superseded by a format that has more in common with the social media tools today’s users have come to enjoy.

You had to see the webcast (and followed the liveblog): The president-appointed chairman who oversees America’s $26-trillion investment management industry was talking mash-ups, RSS and the T-word, Twitter!

Twitter, corporate websites and corporate blogs will be used to disseminate financial information. Corporates will use those channels to communicate to the market and to shareholders. Using PR wire services is going to be phased out, heavily affecting that lucrative business. That’s the reading between the lines here, and it’s brewing into an ugly storm.

David Blaszkowsky, director of the SEC’s Office of Interactive Disclosure, said: “After 75 years of document-based static financial reporting, whether in paper documents or in electronic equivalents, it is exciting to see the SEC poised to cross the ‘data threshold’ and help investors receive financial information that is dynamic, usable and ready to go as they make their investment decisions. And when the investor wins, so does the public company, fund, or other filer who simultaneously benefits from greater transparency and trust in our markets. By tapping the power of interactive data to tear down barriers to quick and meaningful investment information, markets can become fairer and more efficient while investors can possess far better quality data than was ever possible before.”

IDEA allows for slicing and dicing of financial information and comparisons much like XBRL, which I mentioned here. It will be used to enhance Edgar filing for the next three years, and then replace it entirely.

post first published on TechLeader

About Derek

My key interests are online investor relations, websites, social media, enterprise 2.0 and intranets, and XBRL. Speak to me if you need a solution in any of these disciplines, or follow my knowledge links on this site and others. Find me on Twitter, LinkedIn or in recent conversations.