Compliance v. Communications

Last week’s SEC revised RegFD guidance brought out opinions from every possible investor relations pundit, social media guru, business thought-leader, competitive critic and (ahem) corporate services vendors. I had to field inbound calls from clients and deal with industry snark regarding our opinion, and the disingenuous view that newswires applaud the social media guidance but only with the “still need a press release” caveat.

Let’s unblur the lines between compliance v. communications in context to this new 2013 updated guidance to the 2008 updated guidance from the SEC 2000 Regulation Fair Disclosure ruling.

Regulatory compliance

  1. File with the SEC
  2. Use recognized communications channels simultaneously. Or… not at all.

Shareholder communications

  1. Tell the story (ie: earnings announcement) as transparently and broadly as possible through the channels and media that are appropriate to the audience while targeting specific prospective investors without stepping in any deep muck from compliance point #2 above

twitterscaleAs a single channel, social media is an impractical tool for regulatory compliance. What makes the investor relations website and news releases a practical choice is they are the de rigor “common denominator” for material information from a public company: at least for the realistic future, as much as anyone can predict that.

Is it fair to require an investor to join a certain social network to get material information? Technically, investors can lurk in Facebook and Twitter, however, practically (to receive real-time alerts) they must sign-up. LinkedIn requires you to join and will identify investors personally. Selective disclosure and Notice & Access infractions rolled into one!

Social media is an excellent tool for transparent shareholder communications. In fact, so excellent that in May 2012, we integrated the top social media network for investors, StockTwits, into our Capital Markets Visibility 365 product, a communications program created to help small and micro-caps.

PR Newswire has a full quiver of tactical investor relations and SEC compliance services to match the strategy an individual company has towards regulatory compliance and shareholder communications.

Compliance Communications
Vintage Filings: 10-k, 10-Q and 8-Ks, XBRL IR Room investor relations website
IR Room investor relations website Earnings call telephony
Earnings call telephony Earnings call webcasts
Earnings call webcasts StockTwits
Press releases Inbound Investor Targeting
Outbound Investor Target (buy, sell-side, quantitative)
IR Room App
Press releases

Absolutely, investors use social media and it will find its best fit in investor relations. I do know it’s great for marketing. :)

Have a great day.

11 responses to “Compliance v. Communications

  1. Would it be best to have companies list their primary source for corporate announcements? In addition to list this issue on annual proxy statements similar to votes made for auditors?

  2. Straight up from Brother Bradley

  3. Exactly, Owen, companies need to identify their channels, although no one does now… the press release seems to be the unsaid default. To switch from that legacy default. I assume IR departments would have to aggressively promote that “our material disclosure will be available for shareholders (here).”

  4. The ushers will be passing the collection plate at the end of the sermon, Geoff. Give til it hurts.

  5. it may be “de rigor” for a full quiver of communications channels to include social media, but I will still file with the SEC and put out press releases to disseminate material information. I have never been able to say
    anything in 147 characters…

  6. Thank you. That is my point. Many IRO said the same thing, nipping the using Twitter as official disclosure possibility in the bud.

  7. I think this ruling shows how shallow social standards are. Prior to Facebook, one was never “friends” with a CEO. A CEO had to sign agreements of what he could say on the World Wide Web. Netflix is a Bay Area company where they think they are above the law and anything that they think is “old” is wrong. Just like how email is replacing the standards of formal letters the web is the lowest standard to release “material” information. The other issue is Reg FD extends to private social networking accounts like what Reed Hastings did. He does NOT use a Facebook “page” like other public figures.

    I am a free market guy, but I’ve witnessed Enron, the dot-com crash, the crash of ’08 and any regulation (Reg FD or SOX) that keeps companies at their toes to be a morally appropriate company, I am all for it.

  8. One other thing, what the SEC did was actually ruining the original intent of Reg FD. The new regs basically repealed it.

  9. Pingback: The F stands for Fair, not Fractured | Building Shareholder Confidence

  10. Pingback: SEC on Social Media: The F Stands for Fair, not Fractured

  11. Pingback: » PR Newswire Releases “How-to” Guide for Automated and Hands-free Social Media for Investor Relations Departments

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