Securities Regulation Daily Wrap Up, EXCHANGES AND MARKET REGULATION—SEC Commissioner Paredes Calls for Review of Disclosure Requirements, (Feb 22, 2013)

By Lene Powell, J.D.

Although disclosure is the cornerstone of the federal securities laws, too much disclosure can be counterproductive, SEC Commissioner Troy Paredes said in written remarks today. The remarks were prepared for address at the SEC Speaks seminar hosted by the Practicing Law Institute in Washington, D.C.

In his remarks, the commissioner expressed concern about "information overload" and noted that almost 40 years ago, SEC Commissioner Al Sommer remarked that "the expansion of disclosure has gone forward unremitting." Sommer expressed discomfort over the "quantity and complexity" of the information that investors faced even then. Now, significantly more information is being disclosed, some of it of questionable value, said Mr. Paredes.

While new material disclosures may rightly be required from time to time, the SEC should be open to the idea that certain current disclosures should be more narrowly focused or scaled back, or even eliminated completely, he wrote. Whatever is disclosed should be presented in an accessible manner, such as charts, graphs, tables, and summaries. In addition, social media and mobile devices may cause the commission to rethink how disclosures can be packaged and distributed. According to the commissioner, a top-to-bottom review of the SEC disclosure regime is needed.

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