The Securities and Exchange Commission moved closer Monday toward reducing a paper blizzard as it required 16,000 public companies to file their financial reports with the agency via computer.
The development marks a milestone in the 13-year history of the SEC’s computerized filing system, known as “Edgar.” Over the last three years, the agency has been requiring larger companies to file their quarterly and annual reports via computer in stages, leaving the smallest companies for last. The requirement now applies to most public companies.
Built at a cost of about $111 million, the SEC system is one of the most valuable corporate databases in the world because it contains financial information, contracts and executive pay details of the nation’s major public companies.
Dissemination of this information to Wall Street and individual investors is one of the SEC’s basic missions, and it has become a fixture of the financial markets.
“The entire securities industry hinges on this data,” said Tim Feeney, president of Financials Online Inc., a software company in Bethesda, Md., with a program that makes Edgar documents easier to use for word processors and spreadsheets.
The SEC is examining the future of the Edgar system, asking for public comments on how to modernize it. The outcome will be significant for individual investors, many of whom already view corporate documents for free on a delayed basis on the SEC’s World Wide Web home page on the Internet.