SEC Data Initiative To Improve Transparency For Investors

by Mike Godfrey, Tax-News.com, Washington

29 May 2006

Four months after offering significant new incentives for companies to furnish their financial information in computer-readable interactive data format, the Securities and Exchange Commission has announced that the list of participating firms has grown to 20.

The SEC is encouraging more electronic report filing because it says that the promise of transforming the static, text-only documents companies furnish with the SEC into dynamic financial reports that can be quickly and easily accessed and analyzed by millions will improve transparency for all levels of investors.

The growing number of participants was boosted by the addition of three new companies announced last week: General Electric Company; PepsiCo, Inc.; and Banco Itaú Holding Financeira S.A.

The Commission is giving companies participating in the scheme expedited reviews of their SEC registration statements and annual reports.

Interactive data permits individual investors and analysts to quickly search for individual items of information from financial reports, such as net income, executive compensation, or mutual fund expenses. It also enables them to download selected information directly into financial software. In the near future, it is hoped that popular internet applications will permit automatic, real-time delivery of SEC financial data direct to investors' desktops.

"Interactive data will vastly improve the delivery of financial information to individuals and institutions alike," explained SEC Chairman Christopher Cox.

He added that:

"It has the potential to slash hours of waste, cost, and inefficiency - not just for the users of financial data, but for the companies that prepare it as well. Even more importantly, it will help level the playing field for tens of millions of average investors."

"This is in keeping with all of our recent policy initiatives at the Commission, which are designed to improve the quality of disclosure for the average investor," Chairman Cox concluded. "Our aim is to empower everyday investors to make better decisions for their families, their retirement, their health care, their education and their savings."

Recommended