SEC Investor Advocate Rick Fleming Discusses Benefits of Structured Data

SEC Investor Advocate Rick Fleming spoke at the Financial Regulation Summit. His remarks concerned ways in which to leverage technology to make filings more useful for investors.

Mr. Fleming focused on two basic filing requirements: (i) a company's "registration statement," which a company must file when it wishes to sell securities to the public, and (ii) periodic reports, which a company must file once it has offered its securities to the public. According to Mr. Fleming, while these filings are required by the SEC in order to assist each investor in making informed decisions about buying and selling securities, the information also "helps to establish a fair price for securities in the marketplace."

Mr. Fleming explained that, pursuant to the JOBS Act, the SEC is conducting a review of Regulation S-K to determine how it could be updated to "modernize and simplify" the registration process and "reduce the burdens" on emerging growth companies. Additionally, the SEC is reviewing the regulation's financial reporting and disclosure requirements. Although Mr. Fleming expressed his approval of this review, he emphasized that the answer is not to eliminate disclosure of facts that are "likely material to investors."

According to Mr. Fleming, technology provides a potential solution to conflicts of interest between businesses and investors, and that solution lies in the area of disclosure reform. He said that the SEC should be able to facilitate technology to simplify the filing process in a way that is similar to the technology used by the IRS to help users fill out Form 1040 electronically. He explained that many types of SEC filings, such as proxy statements, would benefit from structured data, and stated that the SEC should be concerned with both the content of the information provided by companies, and the display and usability of that information.

See: Mr. Fleming's Speech.