Release from Edward Markey
U.S. House of Representatives Subcommittee on Telecommunications and Finance of the Committee on Energy and Commerce Washington, D.C. 20515
EDWARD J. MARKEY ROOM H2-316 CHAIRMAN FORD HOUSE OFFICE BUILDING
David H. Moulton Contact: Jeff Duncan Chief Counsel and Staff Director Phone: (202) 226-2424
MARKEY APPLAUDS INITIATIVE TO PUT SEC CORPORATE FILINGS ON INTERNET COMPUTER NETWORK
WASHINGTON -- Representative Edward J. Markey (D-MA), Chairman of the House Telecommunications and Finance Subcommittee, today applauded the National Science Foundation's decision to fund a pilot project aimed at making corporate disclosure documents available through the Internet computer network. The project will take corporate filings submitted to the SEC's Electronic Data Gathering and Retrieval (EDGAR) system and make them available electronically, where they can be accessed by the public.
"This project will launch EDGAR right into cyberspace," said Rep. Markey, who explained that, "Soon, the public will be able to obtain low-cost electronic access to a mother lode of information, including registration statements, and annual and periodic reports from virtually every major U.S. corporation."
Rep. Markey said, "This pilot project may help to demonstrate new and more efficient ways of making large government databases available to the public over the information superhighway."
"It can potentially benefit investors seeking access to current information about companies, economists and other researchers interested in corporate trends and developments, journalists covering the business beat, and other individuals or public interest groups interested in understanding what is going on in corporate America."
Since the early 1980's, the SEC has been developing the EDGAR program to automate the filing, acceptance, dissemination, and analysis of the more than 10 million pages of disclosure information annually submitted by public companies.
In February, the SEC approved formal implementation of the EDGAR program, under which the first mandatory electronic filings began earlier this week for about 500 large corporations and investment companies. Another 1,200 companies were required to use the system starting in July, and over 3,0000 companies will be required to file their disclosures using EDGAR by the end of this year. Eventually, all 15,000 SEC-registered companies will be required to use the system.
As the EDGAR program has moved towards operational status, many potential users of the filings -- such as investors, finance professionals, journalists, researchers, and public interest groups -- have expressed concerns about the potential high cost of public access to EDGAR information under the SEC's current dissemination strategy. This strategy relies on a private information vendor, who sells EDGAR at a regulated wholesale price to other retial information vendors, who in turn resell the data to the public. Over the last several months, the Subcommittee on Telecommunications and Finance, which has jurisdiction over the SEC and is responsible for national telecommunications policy, has been examining the adequacy of this dissemination strategy.
In response to the Subcommittee's inquiries, in April, the SEC announced two steps aimed at offering the public greater access to corporate filings submitted through its Electronic Data Gathering Analysis and Retrieval (EDGAR) system, including providing CD-ROMs to Federal Depository Libraries and making diskettes available through the SEC's public reading rooms. At the same time, the SEC expressed technical and cost concerns regarding suggestions that it directly fund electronic access to EDGAR data.
In July, the House of Representatives approved the SEC's Authorization Bill (H.R. 2239), which earlier was reported by the Subcommittee and the full Energy and Commerce Committee. The Committee report accompanying the bill expressed support for initiatives aimed at making EDGAR data available over the Internet, stating that:
The Committee agrees that there exists a need for a broad-based government policy on information dissemination, and it also believes that it would be unacceptable if time- and cost-efficient access to Commission filings in electronic form were denied to significant groups of market participants and other interested parties because of a failure of the existing dissemination approach to meet their needs.
The Committee noted that the prospects for a significant retail market for EDGAR data developing "are at present uncertain" and that therefore, "a pilot project aimed at providing EDGAR data to the university research community and other interested persons over the Internet ... may prove to be a useful supplement to the current dissemination strategy, which will continue to rely on private vendors for distribution of EDGAR data."
Rep. Markey concluded, "I want to commend the National Science Foundation for their leadership in taking the initiative to provide the funding for this project. Both the New York University Stern School of Business and the Internet Multicasting Service are performing an invaluable public service in agreeing to investigate ways of making EDGAR data available over the Internet, and I wish them success as they move forward with this important project."