LIKE many in the investor relations community, I’ve been following and commenting on the public discussion between Sun Microsystems CEO Jonathan Schwartz and the U.S. Securities and Exchange Commission about Regulation FD and corporate website disclosures.
In a letter to U.S. Securities and Exchange Commission Chairman Christopher Cox that he posted on his blog a couple weeks ago, Schwartz lays out in point form what he believes would be required for companies to meet the broad, fair and non-exclusionary access requirements of Regulation FD through website postings.
Here is the relevant text from his letter:
What we propose is a new policy under which online communications would fully satisfy Regulation FD’s broad distribution requirement provided that:
- for a webcast (and related slides), the webcast is made available on a company’s investor relations site and notice of the webcast is posted at least three business days in advance or as early as possible;
- for a corporate blog or individual blog of a senior official of the Company (as defined in Reg FD), the blog is linked prominently to the company’s investor relations site; and,
- for a press release, it is posted to the company’s investor relations site within the time periods specified for Form 8K filings.
To ensure broad access, these online communications would satisfy Reg FD only if they were:
- offered via a broadly accessible Web syndication format, such as RSS or Atom;
- made available for at least 1 year;
- accessible using any open, non-proprietary, free browser on any standard OS;
- accessible to persons with disabilities;
- made available in an open, non-proprietary, royalty free format; and,
- accessible without registration, restriction, or fee.
In order to ensure that the average investor could locate the information on the corporate site, we suggest that the SEC also consider requiring companies to maintain a separate page titled “Official Investor Communications” that is linked prominently from either the main page of the company’s website or the main page of the company’s IR site. This page would include a chronological list of all press releases (or all material press releases), blog entries, notices of webcasts and actual webcasts. This could then be syndicated as an RSS or Atom subscription.
All of this seems perfectly good to me, except that I think email notifications should also be supported until such time as RSS is in widespread use.
I really like the last paragraph. Essentially, Sun is suggesting that every company have a formal, managed disclosure feed in RSS or Atom that aggregates links to all disclosures relevant to investors — news releases, blog posts, event notices, event webcasts, SEC filings — in one place. This is what I was suggesting when I referred to an “investor relations feed” back in October 2006 when the debate first started.
But I can’t help feeling that Sun would have much more credibility with the SEC if the company’s own investor relations department actually practiced what the CEO is preaching. They don’t, but they should so that we can all see and experience the concept in practice.
What do you think about the process and the standards Sun is proposing? Would your company be able to meet the requirements Schwartz has outlined?