Is This the End of Press Release? SEC Provides Latest Guidence for Corporate Disclosure through Social Media

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by: Idris Mootee

I am not a fan of press release. 99% of press releases issued everyday are junk and there are just too much noises out there. But companies need to use this to distribute important news about their companies.

For a long time Jonathan Schwartz (CEO of Sun Microsystem) has been lobbing the SEC to allow disclosure of financial information through corporate blogs. In a landmark announcement, a historical decision was made to allow the distribution of corporate information through corporate blogs to satisfy disclosure requirements.

The IR Web Report explains, “UNDER certain circumstances, companies can rely on their websites and blogs to meet the public disclosure requirements under Regulation FD (Fair Disclosure), according to new guidance unanimously approved by the US Securities and Exchange Commission today.” This is officially the end of press release.

The SEC outlines boundaries for sharing information as well as holding companies and their employees liable for the information that they post on blogs and discussion forums. Social Media is now officially recognized even for distribution of critical disclosure. A more important most significant change stemming from the new SEC guidance is that Web-based disclosure does not have to appear in a format comparable to paper-based information, unless the Commission’s rules explicitly require it. There are still debates to whether a Social Media Release should cross the wire and if so, what format and design it should resemble. I thin this will all be worked out and we expect to most of companies’ releases to be through their blogs.

I think with a little creativity, we can think of a bunch of features that together constitutes a comprehensive Social Media IR Solution. This is a great opportunity for companies to reach their audiences directly. I think we can make these social media releases to be search engine optimized and reaching all market-powered hubs, portals and dashboards. There can be features such as a “moderated” IR system that can become the infrastructure for investor by giving them a voice.

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