SEC's Stein calls for big U.S. push on digital disclosure
WASHINGTON (Reuters) - The United States is behind the technology curve when it comes to publicly traded companies' financial disclosures and lagging in how it gets relevant information to investors, a top securities regulator said on Friday.
In prepared remarks to a conference in Denver, Kara Stein, a Democrat member of the Securities and Exchange Commission, spoke to the heartburn many U.S. regulators are experiencing as digital tools evolve at a whiplash pace.
"It’s time to usher in a new disclosure paradigm for the future – one that will benefit both investors and companies for the decades to come," said Stein in calling for the creation of a digital disclosure task force made up of investors, analysts, academics, companies, and technology experts.
The SEC, the main regulator of all publicly traded stock and securities, has been plugging away at bringing its website for disclosures known as EDGAR up to date and it has launched an initiative to improve both the form and substance of various disclosures.
But Stein said that initiative, which asks hundreds of questions about needed improvements in a special public posting, "falls short."
"There are important questions that were not asked," she said, naming corporate governance as one area ignored.
"It’s important to note that studies indicate investors are looking for better, not less, disclosure," she also said. "This is not a question of 'overload,' it is a question of quality. If companies want investors’ money, they need to be nimble and responsive."
She added that the methods of delivering information to investors may need to change too, noting that reading a lengthy disclosure on the small screen of a mobile phone could be difficult.
"Companies could provide this information once, and then not have to repeat it over and over again across numerous filings. The beauty of this approach is that it completely separates how the company submits the data - the reporting format - from how investors access the data - the viewing and processing format," she said.
(Reporting by Lisa Lambert; Editing by Andrea Ricci)