On May 6, SEC Commissioner Kara Stein delivered remarks at the 48th> Annual Rocky Mountain Securities Conference. Commissioner Stein's remarks focused on two initiatives: (1) a redesign of the EDGAR electronic filing system; and (2) the Disclosure Effectiveness project, which is designed to improve communications between companies and investors. Commissioner Stein asks us to "re-imagine disclosure and how information can be exchanged . . ." and argues that the SEC should conduct investor testing to better understand what is important to today's investors. As an example, she points to greater interest in investing strategies that account for environmental, social and corporate governance criteria, as well as cyber security and climate risk. She emphasizes that "structured or machine-readable data" allows data to be manipulated according to consumer needs, while also making it easier for issuers to maintain and update their data. Commissioner Stein asks the following intriguing questions: ". . . [c]an we envision a future where users query SEC data from their smartphones? Or, perhaps even through social media? Can we give investors a quick way to comparison shop – check the box on three companies and see a dynamically generated side-by-side comparison?" In closing, Commissioner Stein calls for the creation of a Digital Disclosure Task Force that includes investors, analysts, academics, companies, and technology experts and asserts that "[i]t's time to revolutionize our disclosure program." Financial services firms should be looking ahead at the impact technology will have on their disclosure and become an active participant in this potential revolution.
For a full copy of Commissioner Stein's remarks, click here.