On April 15th, Google issued an advisory release that instructed people to visit their IR website for their earnings and also included the following statement:
Google intends to make future announcements regarding its financial performance exclusively through its investor relations website.
Google is able to do this based on the SEC guidance from Aug 2008 regarding the use of websites for disclosure. This guidance states that under certain circumstances, companies can rely on their websites and blogs to meet public disclosure requirements under Reg FD.
As we all remember all too well, shortly after this regulatory change the market collapsed and this new channel quickly faded into the background, while most companies fought to survive the worst recession many of us have ever seen.
However, with 2009 behind us and the recovery underway, the first quarter of 2010 has seen the most activity on the web disclosure front yet, with a number of companies testing out new tactics. Let’s take a look at some examples.
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On Friday August 14, 2009 the SEC released Compliance and Disclosure Interpretations regarding Regulation Fair Disclosure (Reg.FD). The following post is a direct lift from the SEC website: http://www.sec.gov/divisions/corpfin/guidance/regfd-interp.htm
Regulation FD
Last Update: August 14, 2009
These Compliance and Disclosure Interpretations (”C&DIs”) comprise the Division’s interpretations of Regulation FD. Some of these C&DIs were first published in prior Division publications and have been revised in some cases. The bracketed date following each C&DI is the latest date of publication or revision.
Section 101. Rule 100: General Rule Regarding Selective Disclosure
Question 101.01
Question: Can an issuer ever confirm selectively a forecast it has previously made to the public without triggering the rule’s public reporting requirements?
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I attended an interesting CIRI (Canadian Investor Relations Institute) round-table luncheon yesterday, and the topic of discussion was Understanding how the buy-side makes decisions . The format of the session was great; it was almost entirely Q&A and provided the opportunity for participants to openly dialogue with the speakers. The panelists were Stephanie Griffiths, Lead Portfolio Manager for Mackenzie Ivy Enterprise Fund, and Craig MacAdam, Portfolio Manager with the Aurion Capital equity team. Both were frank and concise in their answers, and while much of the information they provided was fairly intuitive, I did find some of their comments surprising and interesting. Read more…
January always inspires retrospectives on the good, the bad and the ugly of the previous year could you ever run out of content for 2008?
The 2008 Year in Review � Securities Litigation and Enforcement, is the first of a regular webcast series on related topics from Securities Docket(an online publication that tracks securities litigation and enforcement developments on a global basis).
This one hour presentation touches on all the big stories: the financial crisis; Siemens bribery; Mark Cuban and a host of other litigations (both successful and not); the Madoff scandal (could you have scripted it better – that the pronunciation of his name is: Made-off ?); the liability exposure of the major accounting firms; the culpability of the SEC in some of the year’s financial disasters and its need for a makeover…
Kudos to Securities Docket for assembling such an impressive speaker panel, all of whom have very worthwhile blogs – which inspired me to write this post: Read more…
The new Reg. FD guidance governing web disclosure has underlined the importance of the corporate web site as a primary source of information for investors and the capital markets. As more issuers look to fully leverage web technologies to meet compliance requirements, the need for integrated disclosure controls and comprehensive records becomes increasingly important.
Determining the best approach to these requirements should not be something delegated to the web master or IT department (although they will ultimately be involved). These are communications, compliance and risk management issues – requiring the involvement of Corporate Legal Counsel, Investor Relations and the Disclosure Committee.
Strong disclosure controls & procedures, supported by consistent, thorough and searchable records is an issuer’s best defence in the wake of a regulatory inquiry. To reduce risk and liability, records should be able to demonstrate due diligence by documenting:
- what was on the web site at any given point in time (including all downloads, presentations and information populated through data feeds)
- the accessibility of the content (to illustrate that negative information wasn’t ‘buried’)
- the full chain of approvals/timelines for information posted to the site
There are several ways that issuers try to capture and maintain records of their web site disclosure including:
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Yesterday, I submitted the following letter to the SEC regarding our comments on the latest Reg. FD guidance.
To view a complete list of all the comments submitted go here: http://www.sec.gov/comments/s7-23-08/s72308.shtml
———————————————————-
November 5, 2008
Florence E. Harmon
Acting Secretary
U.S. Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549-1090
Re: Commission Guidance on the Use of Company Web Sites (the guidance)
File No. S7-23-08
Dear Ms. Harmon,
This letter is in response to the request for comments on the Commission Guidance regarding the Use of Company Web Sites under Regulation Fair Disclosure (Reg. FD). To give you some background on my company, Q4 Web Systems is a software firm founded in 2005 that provides on-demand solutions to help public companies in the management and distribution of corporate material information. We are committed to using emerging Internet technologies to help public companies reduce costs, manage risks and build better relationships with their investors and stakeholders.
Introduction
We fully support the SEC’s guidance regarding the use of company web sites for the disclosure of material information. Since the original Reg. FD ruling, we have seen a dramatic transformation in how individuals and the market communicate with one another. As the penetration of the Internet surpasses 70% in North America, and with the emergence of new web services and capabilities, we now live in a world where the distribution of information is immediate, free and democratized. In the past, only media companies, newswires and their partners had the ability to move information through the market. Today a combination of web sites, RSS, email, search engines, social networks and emerging communication platforms like Twitter now moves information throughout the world at a rapid pace and at no cost for distribution. With the pace of innovation on the Internet increasing, this trend of immediate connectivity will only continue. The recent guidance is an important step in recognizing and supporting this key trend.
Our comments related to this recent guidance are outlined below.
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We attended a NIRI webcast on Tuesday on how to improve your IR website based on the SEC’s recommendations regarding the web site as “public disclosure” for the purposes of Reg FD.
There was a lot of information crammed into the 1 hour session – the first 20 minutes or so was basically a summary of the SEC guidelines that were released on Aug 1. A bit dry to be honest, but the “Do’s and Don’t’s” portion that followed was likely beneficial to attending folks who aren’t as familiar with the new guidelines. Read more…
Yesterday I posted about the importance of the controls over the vehicle in which corporate disclosure is distributed.As I mentioned, it wasn’t supposed to be about plugging our products, but as I was creating the post using Q4 PRESS I took a few screen shots throughout to be able to demonstrate how simple it was. Read more to see how simple it is to satisfy Reg FD for blog content with Q4 PRESS.
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The other day I came across a Tweet from Tom Becktold at BusinessWire:
becktold From IR Magazine: Perils in relying on company website as primary channel http://tinyurl.com/6qnlx9 about 3 hours ago from web
I’m always interested to see what IR Magazine has to say so I checked it out. I was disappointed to see the article was based on a “study” from The Equity Group that says the majority of security lawyers don’t support web-site disclosure. I dug in more and found the press release that the article was based on.
Here are a couple of key things to note…
The Equity Group was commissioned by someone to conduct this study. They spoke to 15 security lawyers and used this as their sample, which according to research experts , falls well below what would be required to represent the full population of US securities lawyers. In addition, no information was given as to the nature of the survey – which as it turns out, was actually a poll. Personally I would love to see what the actual questions in the poll are.
According to the Equity Group, an ‘overwhelming majority’ are against web disclosure. In addition to the problems associated with the sample size and the ‘survey’ itself, let’s take a look at some of the ‘problems’ the article identifies with respect to the Reg. FD web disclosure model:
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Every now and then something happens in the market that almost demands for me to shout from the rooftops about what we’re doing here at Q4.
On August 1 the SEC issued new guidance that deems corporate web sites and blogs as compliant with Reg. FD providing that certain criteria are met. This allows a public company to disclose information on their corporate web site, without having to issue a press release through an approved news wire service.
What’s bad for the newswires, whom have long enjoyed a guaranteed flow of business, is great news for issuers who stand to save tens or hundreds of thousands of dollars in newswire fees. Considering the economic climate, this couldn’t happen at a better time, as companies look to trim the fat.
Many issuers are adopting a ‘wait and see’ attitude, looking to their peers to see how the market responds to the new Reg. FD web disclosure model. Others are starting now to transition their web sites toward Reg. FD compliance. Darrell Heaps, CEO of Q4 Web Systems, wrote an interesting blog post on how to make your web site a ‘public’ disclosure channel under new SEC guidance and Reg. FD.
Q4 Web Systems has long recognized the importance of web disclosure and the inevitability of this new legislation. More than 3 years ago we built Q4 WEB – a fully-featured IR web content and disclosure management system that is a perfect response to the SEC’s new guidance. Here’s why:
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