Securities and Exchange Commission Chairman Christopher Cox announced this week that the SEC will be conducting an internal inquiry into the structure of its current disclosure system, creating a fundamental rethinking of financial disclosure.
The study, named 21st Century Disclosure, will include reviews on the existing requirements of the SEC disclosure system with a focus on the methods of information disclosure from brokers, mutual funds, and other regulated companies, and how information is released to investors throughout the market.
"Sunlight remains the best disinfectant for problems in our capital markets," Cox said. "We'll be examining how to improve the way disclosure works, including tapping the full potential of today's technology and integrating it seamlessly into our regulatory approach. That could mean fewer confusing forms, and more useful information at investors' fingertips in a form they can really use."
The investigation will also seek alternative strategies, which incorporate advances in technology. All the while, the SEC will attempt to adhere to the newly proposed blueprints for the search, acquisition, and release of data.
The first phase of the 21st Century Disclosure inquiry will be complete by the end of this year and will provide plans for improving the utility and timeliness of SEC disclosure reports. Phase 1 will be followed by the creation of an advisory committee that will go in-depth through a public and consultative process investigating the disclosure system.
The study will be led by William D. Lutz of Rutgers University, who has experience in working on disclosure issues within the SEC.