Reducing corporate disclosures could harm investors, a CFA executive warned Thursday.
“We can’t lose information," said Mohini Singh, the CFA Institute's director of financial reporting said. "There could be a big danger in cutting disclosure regulations. That must not happen."
But Singh was a lone voice at the Data Coalition’s Financial Data Summit in Washington, D.C., which echoed a constant drumbeat from industry supporters about how disclosure requirements by financial regulators are too costly, too duplicative and (as Singh disagreed) often immaterial.
Everyday investors get left "holding the bag,” said Ben Brown, a former counsel for then Securities and Exchange Commission Republican Commissioner Daniel Gallagher. They now both work together at the securities regulation consulting firm Patomak Global Partners.
Brown said disclosure requirements have skyrocketed in the six-and-a-half years since the Dodd-Frank Act was passed, leaving the SEC and Commodity Futures Trading Commission holding a lot of information they have no idea what to do with.
With the regulatory reset being pursued by the Trump Administration, Brown said the SEC and CFTC Chair nominees—Jay Clayton and Christopher Giancarlo, respectively—could conceivably get in a room with Finra President Robert Cook after they are confirmed and harmonize disclosure requirements.
Tom Quaadman, executive vice president of the U.S. Chamber of Commerce Center for Capital Markets Competitiveness, advocated the establishment of a joint company file, where businesses could keep disclosure information in a single document rather than having the same information repeatedly duplicated, with considerable time and expense, in various disclosure forms.
“The lack of a modern disclosure delivery system is a drag on economic growth because companies are not getting data to the investing public in a way they can use,” he said said.