I was in Washington this week to attend the SEC’s open meeting for rulemaking on credit rating agencies… that agenda item was postponed but I had a chance to visit with Mark Story of the SEC. I got to know Mark through the SEC’s informal “blogger network”.
Mark had wonderful news that he shared with me… he has been promoted to a new position at the Commission as the Director of New Media… brilliant…
Because “new media” is a rapidly evolving field Mark said that his mandate is more principle based… at the highest level his focus is to leverage the newest communication networks (Facebook, YouTube, Tweeter, RSS feeds, consumer generated media, etc) to reach investors…
The Commission sees the channels of information growing exponentially and wants to ensure that the voice of investor protection and enforcement is being heard where investors are spending time… this is a great strategy… and I think Mark has a tremendous background to do this work… you can read more about Mark and his views on integrating “social media” and communications for institutions here on his blog…
Since bloggers get to “comment” and not just “flack” I wanted to make some suggestions to Mark and the Commission about this new approach after thinking about it for a few days…
The SEC is the standard setter or rulemaker for the securities markets… this effort encompasses the protection of investors, the oversight of securites exchanges and clearing corporations, self regulatory organizations, public company reporting, accounting standard oversight and investment advisors and mutual funds…
Within those pools of responsibility are growing communities of “stakeholders”… who participate in networks and create “user generated content”… seek these networks… use these networks… connect to the constituents in these networks…
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The list of networks outlined by Mark suggests primarily a retail focus for new media outreach…
I want to encourage the Commission to think of their “investor protection” mandate a little more broadly than just individual investors (assuredly the most vulnerable)… but investors of all sizes and sophistication need to know what the Commission is doing in its rulemaking and enforcement actions…
Orderly and fair markets are achieved when all market participants know what the boundaries are…and who is transgressing the rules…
Regulatory arbitrage is a big activity so connecting with investors at every level of the market structure helps protect market participants from each other… the more participants who know the rules the more fairly the game is played…
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Here are a few examples of communities to think about communicating to …
>/> The 250,000 professional investors in the Bloomberg network — these are the active market participants… this is “the market” … the New Media Director could get a Bloomberg terminal and have a messaging account or set up a news organization account to distribute announcements which BBG users can subscribe to… if you want to reach “the market” there is no better way to do it ***.. talk to the market…
>/> Emerging social networks of financial professionals — Reuters, for example, is planning to bring a social network for investment professionals online… they will be waiting to hear from you… others will be emerging to compete in this space… think registered reps and investment advisors…
>/> The international standards setting organization for electronic trading — FIX Protocol — the New Media Director should consider posting announcements of proposed and final rules which relate to exchanges, trading and market data and anything else this diverse community of technologists might be interested in… don’t be worried about trespassing on this site, or any site, cause these boys are not bashful about running you off if you are posting content that is not applicable… I think posting from the Commission would be very welcomed…
>/> The international standards setting organization for derivatives — Financial Products Markup Language (FpML) — ditto… like the FIX Protocol forum posting above… this is the derivative crowd and a little more edgy than the FIX boys … walk lightly here but relevant information would be welcomed…
>/> The blogs of those who build investor tools — Google Finance blog and Yahoo! Finance blog — these are communities that would be particularly interested in disclosure, market data and interactive data issues… these portals are all about aggregating information for investors… feed information about the Commission to them… encourage them to read proposed rules… and encourage them to comment…
>/> Groups of financial professionals on LinkedIn and other professional social networks — there are evolving groups of financial professionals on these social networks that might make good contact points… for example on LinkedIn there is a Financial Market Data group with 2,249 members… and they list “regulation” as one of the topics of the group… there is a LinkedIn Chief Financial Officer group with 3,266 members who might want to hear about IFRS announcements or interactive data timelines…
>/> Institutional blogs — its an amazing thing that institutional investors and firms are engaging in blogging… but they smell the winds of openness… and if it brings an competitive advantage to them in some way they will be all over something… so think about leveraging the audiences that they are developing… here are a few places to think about… Over the Counter blog … FT Alphaville … many more available upon request…
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This is such a great initiative on the part of the SEC… I really appreciate being briefed on the effort… this is just one component of an outstanding set of projects that the Commission has taken under Chairman Christopher Cox… although the effects are not readily apparent in the the markets the long term effects will be substantial… interactive data… plain English… the evolution from “form based disclosure” to “data based disclosure”… leveraging new communications channels… all this builds more substantial investor protection … helps the players to know the rules of the game… moves disclosure and data closer to investors… enhances transparency… open engines - investor protection…
Follow the SEC on Twitter: @SEC_Investor_Ed
*** Sweaty palms in the General Counsel’s office… (sorry guys… creating change is challenging work)
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