IT IS deeply ironic that while people like me are jabbering on about the demise of the big newswires, over the pond in Europe they’re just getting their first taste of mandatory regulatory wire services.
On Friday, the French securities regulator AMF officially recognized four “primary information providers” or newswires under the Transparency Obligations Directive (TOD), which began a staggered launch on Saturday as part of a broader package of rules that are supposed to harmonize and modernize corporate disclosure across the 27 member states.
The TOD is designed to make sure companies disseminate news and information throughout the European Union so that all interested parties have equal access to it. Newswire services are the big beneficiaries of the directive.
Even though the European Commission earlier proposed that companies should be able to use their own websites to meet the TOD, the wire services have managed — through not inconsiderable lobbying — to put themselves in the middle of the action.
Indeed, PR Newswire’s managing director of Global Investor Relations Services Mark Hynes sits on the rather pompous sounding Committee of European Securities Regulators (CESR) Consultative Working Group on the Transparency Obligations Directive. He has blogged in spirited defense of why PR wires are still relevant.
Meanwhile, Business Wire boasts that it has been “actively involved in discussions with the European Commission, Committee of European Securities Regulators, and other contributing policy-making organizations since the TOD legislative process began in 2001.”
Technology overtakes plodding regulatory process
The fact is, technology has overtaken the plodding regulatory process. Back in 2001 or even 2002, syndication technologies like RSS and Atom weren’t even on the radar of the regulators. No one could envisage the rapid pace of technology advancement that we have witnessed and still will continue to see.
They did not know that a technology would quickly become available that allows anyone anywhere in the world to automatically receive text, audio or video news updates on their desktop or in a mobile device with just a click.
And they couldn’t foresee that this same new technology would prompt regulators in the United States to take a second look at whether companies should be able to use their websites to publish scheduled disclosures.
Anyway, as it stands, the current system being built in Europe is the best thing going. However, regulators will need to revisit the question of using corporate websites for disclosure again in the near future.
As far as possible (and it’s not always possible), European companies and international firms with European listings should strive to keep their releases short and basic and include links to additional information on their websites.
Staking claims on rich pickings
Yesterday, I got two emails from Business Wire. Each contained a news release about BW’s European operations (how ironic, a wire service sending me email to make sure I get the news!).
I figured that since I’ve recently been knocking newswires as a tool for disclosure, they wanted to rub my nose in the fact that regulators in Europe are just now adopting the very technology I’ve been dismissing as partly irrelevant.
But that’s not actually what’s going on. Instead, what we have is a nice little contest between Business Wire and PR Newswire. You see, in the first release BW sent me, which was issued last Wednesday, we’re told that BW is one of the four wire services France’s AMF has officially recognized. The other three are Actusnews Wire, Companynews and Les Echos.
See? No PR Newswire!
And if you didn’t notice that, BW underscores the point with this in the release’s third paragraph: “Business Wire is the only global commercial newswire on the AMF list.”
That release prompted PR Newswire to issue its own release on Saturday. In it the world’s biggest PR wire service made sure to point out that it has “a partnership” with Les Echos, one of the officially recognized French primary information providers, “to assist French companies in their compliance with the new European regulations.”
See they weren’t locked out of France?
PR Newswire also said it “will provide listed companies in Europe with a disclosure service that is compliant with the Transparency Obligations Directive,” and it boasted about its “dedicated links to the major equity terminals, key European financial websites and newspapers in all 27 EU member countries.”
Then yesterday Business Wire counter punched with a similar release saying it has “regulatory disclosure networks in more financial markets than any other service provider.”
It all makes them look rather greedy, especially when you consider that European IR seemed to be getting on quite well without them before the TOD came along.