The Securities and Exchange Commission plans to launch an ambitious project to re-examine how companies and other entities should make financial disclosures to take advantage of the latest technologies.
With its "21st Century Disclosure Initiative," the SEC will look at how it acquires information from public companies, mutual funds, brokers, and other regulated entities, and the way it makes that information available to investors and the markets.
The aim of the wide-ranging internal inquiry will be to outline the attributes of a future disclosure system that incorporates technology, the new ways in which investors get their information, and recent developments in how companies compile and report information in their SEC-mandated disclosures. The SEC has already begun encouraging companies to provide filings in Extensible Business Reporting Language, or XBRL, format, to make them easier to compare and analyze with software.
The first phase of the study will be completed by the end of 2008, when a follow-on advisory committee will be appointed to consider the questions in more detail through a public consultative process.
"We'll be examining how to improve the way disclosure works, including tapping the full potential of today's technology and integrating it seamlessly into our regulatory approach," said SEC Chairman Christopher Cox (pictured) in a statement. "That could mean fewer confusing forms, and more useful information at investors' fingertips in a form they can really use."
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