SEC Proposes Rule Change for Better Company Information

The US Securities and Exchange Commission (SEC) agreed to formally propose using new technology to get information to investors faster, more reliably and at a lower cost. At the centre of the SEC proposal is ‘interactive data’, which is comprised of computer tags similar in function to bar codes used to identify groceries and shipped packages. The interactive data tags identify individual items in a company’s financial statement so they can be easily searched on the Internet, downloaded into spreadsheets, reorganised in databases, and put to any number of other comparative and analytical uses by investors, analysts and journalists. The proposed rule would require all US companies to provide financial information using interactive data beginning next year for the largest companies and within three years for all public companies. Corey Booth, SEC chief information officer, said: “Interactive data represents the logical next step in the evolution of company disclosure, just as HTML and Internet access were the next logical step a decade ago. And like a decade ago, this move will usher in a quantum leap in helping companies explain their business to investors.”


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