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04/10/2006

Sun CEO lobbies SEC to recognise blogs in "fair disclosure"

The President and CEO of Sun Microsystems, Jonathan Schwartz, has written to the US financial regulator Securities and Exchange Commission (SEC) in the US to ask them to recognise blogs as a means of "fair disclosure".

Mr Schwarz has shared the letter on his own blog, and explains:

Unfortunately, Reg FD doesn't recognize the internet, or a blog, as the exclusive vehicle through which the public can be fairly informed. In order to be deemed compliant, if we have material news to disclose, we have to hold an anachronistic telephonic conference call, or issue an equivalently anachronistic press release, so that the (not so anachronistic) Wall Street Journal can disseminate the news. I would argue that none of those routes are as accessible to the general public as a this blog, or Sun's web site. Our blogs don't require a subscription, or even registration, and are available to anyone, across the globe, with an internet connection. Simultaneously.

He's hopeful that the chairman of the SEC, Christopher Cox will see the sense in this:

We've had enough interaction with the Chairman (and read enough of his writings) to know he understands the utility of the internet to inform investors - but until we see a formal revision or clarification to FD, we'll still be limiting what we disclose via blogs and the internet. And consuming trees with press releases. Which can't, in the long run, be all that desirable.

The implications for the use of blogs and the web and corporate communications if the SEC were to clarify its regulations and include the web would be to legitimise it as a primary communications channel for companies.

We will, of course, watch developments with deep interest.

Thanks to Ross Dawson for writing about this, he points out:

It makes all the sense in the world to use the power of RSS to disseminate information – this in fact would be a significant improvement to current mechanisms – so with just a tiny variation in the regulations on what are appropriate ways of disseminating corporate information, blogging could become quite a different world, with the development a thoroughly corporate segment of the blogosphere focused on egalitarian diffusion of investor information, and by-the-by, resulting a deeper and broader view of public company activities, and better informed investors.

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