SEC To Recognize Corporate Blogs as Public Disclosure. Can We Now Kill the Press Release?

For several years, Sun CEO, Jonathan Schwartz has lobbied the SEC to allow disclosure of financial information through corporate blogs. In a landmark announcement, it seems that Mr. Schwartz may indeed get his wish, and with it, a historical decision that could break the age-old shackles that bound businesses to traditional media and distribution channels in order to satisfy full disclosure.

In a speech yesterday, SEC special counsel Kim McManus outlined new guidance the SEC is about to give companies on when they can use their Websites, including blogs, to disclose material information. What this means is that we can now finally kill the press release, at least in its current form (more on that below).

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."

Chairman Christopher Cox opened up the discussion by recognizing that the Web has matured providing a big step forward for investors, "Ongoing technological advances in electronic communications have increased both the market's and investors' demand for more timely company disclosure and the ability for companies to capture, process and disseminate this information to market participants."

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.

Regulation FD and Social Media

The SEC is taking the right steps to embrace the new tools and services that reach people in addition to wire services. With the recognition of blogs as a viable form of disclosure, under certain circumstances of course, the SEC is officially recognizing Social Media and in a sense, socializing the rules associated with Reg FD.

Perhaps, the 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.

This is music to my ears as it finally opens the door for the Social Media Release.

For a few years, Todd Defren, Chris Heuer, and I have not only defended and charted the opportunity for Social Media Releases (SMRs), but also fielded emotionally-charged questions from the financial and IR communities asking about whether or not an SMR would ever meet disclosure requirements for Reg FD, and without it, what good would it ever be¿

While there have been many discussions and debates to whether a Social Media Release should cross the wire and if so, what format and design it should resemble, my belief is that SMRs should always reside on dedicated blog platforms (WordPress, MoveableType) as part of a Social Media Newsroom. And, Social Media Releases should only complement a traditional press release and disclosure activity and not replace it.

Originally introduced by Todd Defren in response to Tom Foremski's call for the death of press releases, the SMR represents a new socially-rooted format that complements traditional and SEO press releases by combining news facts and social assets in one, easy to digest, and repurpose, tool.