The Securities and Exchange Commission (“SEC”) recently released interpretive guidance regarding the use of company Web sites under federal securities laws. In the release, the SEC acknowledged that the Internet has evolved dramatically since it last issued guidance in 2000 and noted that a company’s Web site has become an obvious place for investors to find information about a company. In addition, technological advances and reduced implementation costs have allowed company Web sites to include more interactive and current information about a company. In fact, the SEC declared that these rapid developments have reached a point where electronic disclosures—whether via EDGAR or a company Web site—have become a superior way to deliver information to investors, as compared to other methods. The SEC also recognized that investors may benefit from allowing companies to present data in different formats from those dictated by the SEC forms or through technology more advanced than EDGAR.
The recently released interpretative guidance targets four key areas of disclosure through company Web sites:
- Compliance with Regulation FD. The SEC has clarified how information posted on a company Web site can be considered "public" and has provided guidance to help companies comply with public disclosure requirements under Regulation FD through Web site postings in lieu of filing a Form 8-K or the use of other permissible methods of disclosure.
- Application of Antifraud and other Exchange Act Provisions. The SEC clarified the application of the liability framework of the federal securities laws for certain types of electronic disclosure, including:
- How companies can provide access to historical or archived data without it being considered reissued or republished every time it is accessed;
- How companies can link to third-party information or Web sites without having to "adopt" that content for liability purposes;
- The appropriate use of summary information in the context of the securities laws' antifraud provisions;
- How statements made by a company (or by a person acting on behalf of the company) in blogs and electronic shareholder forums are subject to the antifraud provisions of securities laws; and
- A reminder that, as in other contexts, companies cannot require investors to waive protections under the federal securities laws as a condition to enter or participate in a blog or electronic shareholder forum.
- Application of Sarbanes-Oxley Disclosure Controls and Procedures. The SEC clarified that information posted on company Web sites would not generally be subject to rules under the Sarbanes-Oxley Act relating to a company's "disclosure controls and procedures."
- Format of Company Web Site Information and Readability. The SEC indicated that information posted on a company Web site need not satisfy a "printer-friendly" standard, unless other rules explicitly require it.
In addition to publishing this interpretative guidance, the SEC is also soliciting, through the release, written comment on any other approaches or issues involved in facilitating the use of electronic media, including as a result of technological developments, to further the disclosure purposes of the federal securities laws. Comments must be received by the SEC on or before November 5, 2008.
The interpretive release is effective as of August 7, 2008.