Web Disclosure Adoption On the Rise
Since the SEC released new guidance permitting public companies to (forgo using newswire services and) disclose material information on corporate web sites and blogs, it has been a wait and see period. Many of the issuers I spoke with across the US (as well as inter-listed Canadian companies) are intrigued at the prospect of reducing newswire costs, but do not want to pioneer the web disclosure model.
Instead some are taking steps to transition and ensure that they can meet the SEC’ s criteria (which contrary to what some people would have you believe, doesn’t mean you can just bury information in the bowels of your site and never tell a soul).
So for those of you who take comfort in knowing that others have gone before you, here’s a bit of news on some who are leading the way as well as thoughts on how to improve their approach:
BGC Partners, Inc. (Nasdaq: BGCP) is a global inter-dealer brokerage firm who on Tuesday issued the following announcement . In compliance with the U.S. Securities and Exchange Commission’s recent guidance regarding notice-and-access news releases, the company plans to discontinue issuance of full-text financial news releases via a wire service and will issue only advisory press releases notifying investors when new and material information is available on its websites. (Part of the transition I referred to earlier, is the use of notice-and-access news releases.)
Coupled with this, BGC also offers RSS feeds and email alerts to push information out to interested subscribers (who don’t have to keep checking back on their web site another myth). That said, BGC has made reference to their web sites where the full text release will be posted, but the links they provide are not active.
Dominic Jones of IR Web Report expresses a few other concerns regarding BGC’s readiness, mainly regarding the limitations of IR web site template solutions, and specifially the Thomson Reuters platform:
- the Thomson platform does not include time-stamping or a change log
- RSS feeds included faulty time stamps
- there was no way for issuers to post content to go live at a precise time – they would have to do this manually
Previously on our blog I made mention of Q4 WEB’s comprehensive, time-stamped and easily searchable record and how it differs from other market offerings. Had BGC been using our product, these issues would not exist.
Dominic also twittered about a few other companies who have been making use of notice-and-access releases for some time, Dundee Wealth here’s an example from their November 16, 2006 Q3 results. And of course my favourite, Warren Buffet’s Berkshire Hathaway , parent company of Business Wire.
Further along the continuum in web disclosure, General Motors announced on its global media web site that it was cutting 10,000 jobs. Although Robert MacMillan of Reuters felt that the information should have been distributed through a newswire, rather than just release it on a “company web site”, he failed to check his facts on just how widely GM’s media site is followed . I spoke with Tom Wilkinson, GM’s Director of News Relations regarding the release. He said that “most of the big automotive companies have media sites that are widely followed by analysts and news journalists, and that GM has been issuing news through its media site for more than 10 years.’ In addiition to posting the information on their site, they also disseminated it through email alerts and RSS feeds to thousands of subscribers. Tom said, “we released the information this way because we were confident that with our following, the information would get out to the market quickly”.
And it did. Within minutes it was on major news portals, twitter and auto enthusiast websites. It was picked up by all the major papers and news broadcasters So, the real point isn’t whether you use a newswire but rather, if your company is widely followed and the topic is newsworthy, it will get picked up – which is exactly why the SEC recognized the need to issue new guidance.
The lesson from GM is that what’s needed to aid news dissemination is to get people to follow you. This supports the importance of building a subscriber base and transitioning to a web disclosure model over time, while you use notice-and-access releases and other methods to let the market know where you disclose your information, and how they can receive automatic updates.
Nobody said that an effective web disclosure model was going to happen overnight but the tide is beginning to turn. Stay tuned!
Related posts:
- Q4 WEB – An Important First Step in the New Reg. FD Web Disclosure Model
- Notice-and-Access Press Releases; An interview with Jason McGruder, VP Investor Relations at BGC Partners
- How to make your website a “public” disclosure channel under new SEC guidance and RegFD
- How to implement new Reg. FD web disclosure – a legal opinion
- SEC Guidance enables corporate websites and blogs to be fair disclosure
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