Friday, May 1, 2009

Mary Schapiro's SEC

In reference to,
SEC's Schapiro Shows Little Interest in Cox's Pet Projects

Personally, I applaud SEC head Mary Schapiro's caution. Technology (old or new) is not a substitute for policy and it seems right that the SEC should pause and assess initiatives on an ongoing basis.

Supplement? Yes. Replace? That's a stretch.

While much work has been put into XBRL, stepping back given the present economic cycle, I can see no driving national interest why the United States needs to rush to catch up to a vision of replacing a body of material encompassing accounting, legal and forward looking commentary people can read with a narrower set of digital files as the primary evidentiary source for corporate reporting.

Proof of efficacy is essential. Within the SEC itself, has the question of the utility of this wonder tool been properly assesed? I respectfully submit that it's not unreasonable to demand that an investment of this magnitude must at least be shown to streamline and magnify effectiveness of the case load work within the Corporate Finance and Enforcement Divisions of the SEC as a stringent proof of concept. I mean is that kind of payback hurdle too much to ask of something that could impact corporate America like the second coming of Sarbanes-Oxley?

Does this mean XBRL won't happen? No. Does it mean that in the end it's just another data file format and not as some would hope a fundamental business language and process sea change? Speaking as both a CEO and a techie, I hope so.

Changing technologies, with regards to the internet versus the wire services, visceral reactions aside, it's likely best to consider all sides of the argument when it comes to the dissemination of corporate action data. Fairness is a process of constantly finding ways so that everyone gains access to information equally. Wire services, for all their synchronization, always reach professionals first. Enabling and encouraging pathways that allow individuals to negate this long time Wall Street advantage seems to be something always worth pondering. ... Tweet!

And finally, grander reporting and regulation topics seem ripe for one of those restart buttons like Secretary of State Clinton uses to manage foreign policy. The Obama White House has already stated its' intent to a process of review for financial markets regulation for the remainder of 2009. Make it so!

1 comment:

  1. Funny, we blogged on related topics about the same time today -- Dennis, you'll appreciate the cadence of these lines from my post: "Technology doesn’t solve problems. People solve problems."