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SEC Guidance on Company Web Site Use

By Briar McNutt and Elizabeth Simon

Over the past several years, rapid developments in technology and the Internet have significantly enhanced the quantity and quality of information available to investors. Investors are now able to retrieve information from the Securities and Exchange Commission (“SEC”) and many companies instantaneously. Acknowledging the significant technological advances since the SEC last provided guidance on Internet issues relating to the Securities Act of 1933 (the “Act”), the SEC, on Aug. 1, 2008, issued an interpretive release that provides updated guidance on the disclosure of investor information on company Web sites. Through this interpretative guidance and recently proposed rules to require companies to file financial statements in an interactive data format using XBRL (eXtensible Business Reporting Language), the SEC has sought to modernize its rules and the information it requires companies to disclose to investors to address the technological capabilities now widely available to most investors.

The SEC issued the release on company Web site use in an attempt to encourage the continued development of company Web sites as a vehicle for delivery and dissemination of information to investors. The release, which supplements earlier guidance from 2000 (Use of Electronic Media, Release No. 33-7856, available online at www.sec.gov/rules/interp/34-42728.htm), addresses the following areas:

  • When information posted on a company Web site is “public” for purposes of the applicability of Regulation FD (Fair Disclosure);
  • What liability a company has for information on company Web sites (including previously posted information, hyperlinks to third-party information, summary information and blogs);
  • What controls and procedures are advisable with respect to information posted on a company Web site; and
  • The format of information presented on a company Web site.

When Information Is 'Public'

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