SEC sanctions blogs: what’s the PR impact?
If you had doubts still lingering about the legitimacy of blogging, give ‘em up.The SEC has sanctioned corporate web sites and blogs as viable communication vehicles for most financial disclosures. This means these outlets can be used to satisfy strict Regulation FD (Fair Disclosure) requirements.
The SEC said material information can only meet Reg FD requirements if:
- the corporate web site is a recognized channel of distribution
- information can be disseminated to the securities marketplace in general
- there’s a reasonable waiting period for the market and investors to react to the posted information
The Q4 blog has some interesting perspective on this SEC decision. They said “If the SEC had come out and said “you must use RSS and email alerts” it would be creating the same problem it is now getting out of. By using a principle based approach, it allows the market to determine what is acceptable and ensures that certain technologies and/or companies are not able to create protected industries (like the newswires did). Having said that, a principle based approach also creates a grey zone that lawyers do not like.”
Whoa. When something as conservative as financial news can be disclosed via social media, it’s a historic sign the days of early adoption have been left behind. Kudos to the SEC for making this move.
This decision raises some interesting short-term discussion points, one of which is the push/pull element. When a company issues a traditional news release over a newswire, the information is measurably pushed out to a pre-determined group of recipients. While there’s no guarantee the news is read by everyone, a company paying a wire service can be assured its information gets out there responsibly and reaches people directly.
What about blogs and corporate web sites by comparison? Do they provide the same ability to reach people directly? The answer is: depends on how it’s done.
Brian Solis of PE 2.0 believes the answer is the social media news release (SMNR). The SMNR combines the best of both worlds: a content rich, SEO-optimized press release with a heavily linked, media rich blog post. This approach can guarantee equivalent, and perhaps even broader, content distribution. But it requires a company consciously re-inventing its news release engine.
Do you think a lot of companies will jump on this? I bet it’ll take some time; there’s a lot of behind-the-scenes machinery to duplicate and most B2B companies are still moving cautiously into the world of social media.
What’s the impact for newswire services? For decades, companies have relied on vendors like PR Newswire, Business Wire, MarketWire and PR Web to release their financial news in a timely fashion. A typical financial disclosure costs $1,000+ to move over a wire service. Will newswires go away over time as the social media news release goes mainstream in a few years? Or will they continue to exist, but in a different or reduced capacity?
Patti Smith once said, “People have the power.” I predict as companies acquire social media smarts, they’ll catch the wind and there will be far less reliance on traditional news wire services.
"What about blogs and corporate web sites by comparison? Do they provide the same ability to reach people directly? The answer is: depends on how it’s done."
I think the answer is a resounding yes. Email alerts, RSS, Twitter and a whole host of "web 2.0" technologies can make this a reality. It's also important that companies also have controls in place for how that information is created in the first place but the biggest challenge is how slow technology changes are implemented within IROs.
We've been having some interesting discussions regarding RegFD and some of the myths being spread by the newswires - may be interesting for you and your readers http://www.q4blog.com/2008/10/24/dispelling-myths-... We are supportive of the guidance and believe that all companies have the right to use web technologies to communicate with their stakeholders. Whether that be through their website, blog or a SMR.