New SEC disclosure tack spurs IR challenge

WASHINGTON: The Securities and Exchange Commission's decision last month to begin disclosing correspondence with companies whose regulatory filings need to be "improved or enhanced" will certainly make the jobs of IR professionals more complicated.

WASHINGTON: The Securities and Exchange Commission's decision last month to begin disclosing correspondence with companies whose regulatory filings need to be "improved or enhanced" will certainly make the jobs of IR professionals more complicated.

To begin with, the move makes available to the public information that was once the private domain of IR officers and company lawyers.

The SEC move also presents IR officers with the challenge of breaking down information for a public less savvy than investment insiders. And it means looking closer at correspondence shared with the regulatory agency.

"It exposes a broader, less sophisticated audience to this kind of information, and that in itself will produce challenges for communicators," said Hulus Alpay, SVP of IR at Makovsky & Company. "Now [IR officers] really have to look at it from both an internal and an external point of view."

The SEC decision will likely open up IR to an unprecedented level of scrutiny. This might come more from the media, Alpay said, than individual investors, who, even with the new transparency, might not want to slog through the dense, technical correspondence.

Uncertainty over how the SEC will present the information worries some IR officers. The commission has not yet finalized details, such as how long it will leave correspondence online or whether it

will tip off companies before postings. The new policy applies to SEC filings that were made after August 1.

Better administration was the cause of the SEC's move, said John McInerney, senior director with Citigate Financial Intelligence, as the commission is already inundated with Freedom of Information Act requests for this information.

"I think with the SEC, one buzz word has been transparency," McInerney said. "They're trying to [open up] their own administrative procedure, which has always seemed on the outside to be occasionally opaque."

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