The Internet and Regulation FD
For those interested in Sun's and my continuing engagement with Chairman Cox at the US Securities and Exchange Commission, related to using the internet as a vehicle to ensure broad, fair and non-exclusionary access to information about corporate performance, please see my most recent letter to him, below.
For those interested in more good thoughts on the topic, see Tim Bray's cogent analysis.
The Honorable Christopher Cox,
United States Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549
Dear Chairman Cox:
In your letter of November 2, you raised potential challenges to permitting blogs and corporate websites to be used to satisfy Reg FD's "widespread dissemination" requirement. Specifically, you inquired whether “there exist effective means to guarantee that a corporation uses its website in ways that assure broad non-exclusionary access, and the extent to which a determination that particular methods are effective in that regard depends on the particular facts.” Some of the comments to my blog echo the same concerns: critical company information could be difficult to find, accessible only with a registration or technologically obstructed.
We understand these apprehensions, but are confident that they can be addressed with clear directives from the SEC on the presentation and accessibility of information on corporate websites. 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.
Sun believes that the twin goals of greater transparency and access to information for individual investors would be served by permitting web-based, real-time disclosures pursuant to the rules suggested above. We urge the Commission to modify Reg FD so that its "widespread dissemination" requirement can be satisfied through disclosure through web-postings alone.
Lastly, I was pleased to review the creative and insightful exchanges resulting from our on-line dialogue about Reg FD. I particularly liked the following comment to your post on my blog:
“Congratulations to both Jonathan Schwartz and Chris Cox...it's astounding to read on a blog dialogue between a public company CEO and the Chairman of the SEC... It's fantastic...keep it up gentlemen...the American investor really benefits.” http://blogs.sun.com/jonathan/entry/sunlight_on_a_cloudy_day...#comments
Sun remains committed to working with the Commission on enlisting technology to the service of the American investor. I look forward to continuing this dialogue.
Chief Executive Officer
Sun Microsystems, Inc.
cc: Michael Dillon, General Counsel, Sun Microsystems, Inc.