SEC to Consider Changes to Disclosure System

The Securities and Exchange Commission will consider revamping its system of quarterly corporate financial disclosure to make reporting more timely, simple and realistic, the agency’s chief said Monday.

“By the time the information our system provides is actually available to investors, it is often stale,” SEC Chairman Harvey Pitt said in a speech to an American Institute of Certified Public Accountants panel in Miami Beach.

The SEC will consider how to make more use of the Internet as it evaluates its 67-year-old system of quarterly and annual corporate disclosures of profit and revenue, Pitt said.

Meanwhile, companies should try to present a more dynamic view of their businesses by disclosing “unquestionably material information when it arises and becomes available,” he said.

Any move toward more frequent corporate disclosure would affect the debate about the SEC’s 1-year-old Regulation Fair Disclosure, which bars companies from giving important news exclusively to stock analysts.

“Reg FD becomes much less important if you have continuous disclosure, because by definition no one has an unfair trading advantage,” SEC General Counsel David Becker said in an interview.

AICPA President Barry Melancon welcomed Pitt’s disclosure review and said firms are willing to work with the SEC.