SEC reporting, Securities regulation

1. CONCEPTRELEASE: BUSINESSAND FINANCIALDISCLOSUREREQUIREDBY REGULATION
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1 SEC shouldconsiderincludingasunsetprovisionsinthe new disclosures. Itmustbe evaluatedbasedonthe
complexity,the size of the changesandimpacton the disclosure. Thisreview shouldbe basedonindividual
itemswithoutsunshine meetinginvolvement
2 The advantage isthat the Staff will make sure thatthe requiredchange isimplementable. The problem with
the processis thatit may require farmore waitingtime. Thatsaid,thisprocessisinthe bestinterestof
commonalityinthe disclosurepractice.
3 Registrantsandinvestorswillnotlike thislongprocess,butthe bottomline isthatinvestorswillbe served at
the end. A lotof costs relatedtoimplementation,uncertainty anddelayedrisk takingwill occurwiththe use
of sunsetprovisions
4 The inputof the staff isverynecessaryinthe overall strategythe commissionhastoapprove inorderto land
softywiththis processandnewdisclosures. Torepeatmyself,the staff studywillbringmore lightstothe
type of registrantsandits investorsreadyfornew rulesandwhen. The staff studywill be agoodinputif it
takesintoaccounts the practical sense of thisplannedadoptionprocesswhileexaminingregistrantsand
investors’concernsforpossible incremental implementation
5 A committee composedof representativesof investingpublicexpertsandstaff expertscanmeetanddiscuss
and provide some recommendationstothe commission relatedtothe wayto deal withthe proliferationof
technologywhile providingtothe investingpublicatransparentandlessasymmetricinformationdisclosure
6 There isnothingwrongwiththe actual system, whatwe have todo isto revisitsome thresholdsbecause
some are outdated andsome needtotake intoconsiderationthe size of the organization. Also,the
materialitydefinitiondoesnotneedanychange.
7 We shouldbalance presentingrequirementsbyinserting industrybasedprincipleddisclosurerequirementin
orderto preserve the benefitsof prescriptive requirementandcommonalitydisclosure
8 The advantage of the principle basedapproachisthatthisdisclosure canfocusonwhat isspecificonthat
organization. Itsdisadvantage isthatthe managementcanuse itsdiscretiontocamouflage baddata. In
addition,there isnotcommonalityinthe disclosure. There isalsoa reputational costof the principle based
approach because sophisticatedinvestorscan nottrust the disclosure withoutreservation. Atthe same
token,registrantswillalwayscomplaintaboutthe prescriptive basedapproachshiftingcontrol from
managementtoregulators
9 Registrantsdonotthinkthat it isdifficultbecausewhentheyare unsure,theycanrelyontheirpowerto
disclose anythingintheirfavor. Idon’tbelieve thatvoluntarydisclosure inthe filinghave provide withintent
to camouflage anydataor foraggressive disclosure activities. Some registrantsbelievethatit isthe onlyway
theycan helpreaderstounderstandtheirorganizationthroughthe eyesof theirtopexecutives. But,too
much unwantedvoluntarydisclosure isprovidedtodistractthe readersbecause somethingiswronginthe
disclosure,tofatigue the readerswithtoolongdisclosure ortowall uptrue andreal data of the organization
10 Thresholdsare helpfulinthe disclosureandtheycaninforminvestorsmore aboutthe organization’s
performance. Ipersonallypreferapercentage of revenuesorassetsasquantitative thresholdsthatmeans
the focusshouldbe on financial health(condition)of the organization(whataboutpeercompetition,they
shouldbe foundonline)
11 The staff must developacombinationof qualitative andquantitative thresholdstohelpthe investingpublic
to examine the organization
12 REPEAT of 9
13 Principle baseddisclosureswill affectthe whole disclosure systembecause the ball will be onthe executive

2. camp.
14 Registrantsshould make sure theirdisclosure isaddressedtoanaverage reasonable investor. Thatmeans
someone withanacceptable knowledge infinance,accounting,financialreporting,securitiesregulation
coupledwithknowledgeof forms,contentandmore or he mustjust have historyof makinghimself
investmentandvotingdecisionafterreliance tothe disclosures. If the registrantoverestimatesthe levelof
itsinvestingpublicreadersitwill provide toomuchinformationincludinggraphs,ratios,charts,tabular
representation,somethingitsreaderswillfindtoomuchto ‘digest’. If the registrantunderestimatesthe
level of its investingpublic,itwill provide toolittle informationhelpingitsreaderstobelieve thatitis hiding
bad data or any otherskeletoninthistype of disclosure. Taylorthe disclosure tothe subsetof the investor
communityispreferablebutthe rule justrequiresandshouldrequire the disclosuretobe addressedtothe
average reasonable investor. Thatmeans,if he/she isasubsetof the investorcommunity,itwillbe greatbut
no everyone will understandwhathe readsinthe disclosure,thisisthe true reality,itisnobodyfault.
15 We shouldkeepthe rulestorequire disclosurethatisformattedtoprovide informationtoreasonable
investorandhelpthemmake investmentandvotingdecisions
16 Whenthe disclosure isaddressedtosophisticatedinvestor,itisfull of ratios,chartsandgraphs and then
textual disclosure. Itmakesthe disclosure toovoluminous. The disclosure cannotpossiblybe tailoredfor
the novice andlesseducated,why? finance,financialreporting andsecurities regulation will neverbe too
simplified.
17 Thisinformationisaccessiblethrough www.SEC.govandcompanywebsite(IR),some companiessende-mail
alertsto theire-subscribersaboutthe availabilityof newlyfiled10-K,10-Qand/or ARS. Sophisticated
investorscan accessthese fileddocumentsassoonas theyare postedbythe SEC througha thirdparty
providers. Thisnewinstantsystemmayormay notviolate fairdisclosure(FD).
18 Anytestingaboutinvestorsuse andaccessto the disclosure will notprovide anymeaningful datatothe Staff
19 Normally,novice investorswithlesseducationandtraininginthe fieldof financial disclosuremaytendtouse
3rd
party analysesorjustmarketprice of the organizationtomake theirinvestmentdecision
20 Professionalsecuritiesanalystsare sophisticatedinvestors,theypreferdisclosure usedwithalotratios,
charts, graphsin orderto shift control fromaverage investorstoprofessionalanalysts.