January 6, 2009
My comment relates to the cross purposes apparent in the SEC raising the prices charged for document services.
I have no issue with the OMB purpose in having the services provided pay for themselves, but, here, the approach applied works against the primary purpose of the agency. I find it particularly ironic that at the same time the SEC is acting to require interactive data that "has the potential to increase the speed, accuracy and usability of financial disclosure and eventually reduce costs for investors" the agency is also acting to perpetuate the opposite when it comes to the provision for paper copies.
The larger issue is NOT tied to charging for the paper copies that are made, but to the persistent ability of companies to avoid meaningful public disclosure by filing forms on paper, instead of electronically, with the clear purpose to avoid public disclosure with the tacit acceptance of the SEC. The current proposal seeks to make the existing barriers even more onerous, which seems it will work against the primary purposes of the agency, as well as against the public interest. That the primary purpose of paper filings is to avoid disclosure is quite clear... from the nature of those filings that are made on paper, and the nature of filings from those SAME companies filing them on paper that are all filed electronically. Enabling that purpose further with higher barriers in cost, will do nothing to reduce the scope of the problem, but is likely to make it worse.
In the interest of helping the agency cover costs, it would be vastly more useful to reduce the scope of the demand that the agency itself has imposed through the obvious inconsistencies in its rules. Also, the agency would be doing a better job of fulfilling its public purposes, by simply not accepting paper filings any longer.
Any number of rules changes would suffice for that purpose:
A requirement that a company filing electronically must file ONLY electronically should eliminate most of the problem.
I do recognize that there will always be some need for exceptions. I don't respect the result that seeks to enable the exceptional as an advantage to those seeking to use it to make information harder to obtain.
A more sophisticated approach, that would meet the requirements for increasing public disclosure while also enhancing the technical capacity of the agency in handling exceptions, somewhat, would be to allow paper filings... but have the SEC (or a related service provider under contract) rather than the filers convert their paper filings into common electronic formats. This approach to moving paper filings that are received into forms enabling electronic document handling at the point of receipt, and as they are received, would substantially simplify SEC work flow and it would reduce internal paper handling costs that are an imposed cost of paper filings that are not an accounting item.
The shift would also better enable transferring the work, time and cost burdens inherent in paper handling to the proper author... those filing on paper. The agency, rather than charging the public for access to paper copies, would make the information freely available, while charging filing fees for paper filings that cover the cost being imposed by paper filings. Further, if there are delays in processing that are imposed by the conversion, the delays are also properly assigned as liabilities to the filers, and not re-imposed along with costs on those seeking access to the public information being disclosed in a filing.
The effort should result not only in a dramatic decrease in the level of paper filings, reducing the costs of handling documents, and reducing the capital cost of sustaining the copy function, but it should convert agency processes to better supporting those which are more useful to the internal methods in work that are the core focus of the system now. Copy machines do not just duplicate pages, they duplicate problems. Externally focused copy making capacity applied to meet others needs, particularly when that need is being imposed on them against their will, does not add value. however, replacing copy machines that sustain a flow of externally focused problems, with input devices, actually expands the capacity of the system to communicate better within the systems design... as it would not be limited to conversions of paper forms into electronic equivalents.
Still, the primary factor is the inability to justify the ongoing IMPOSITION of the need to GET copies in order for investors to gain access to information they should have. Paper filings only enables a barrier in access to that information... which is against the purpose of the SEC. Eliminate the paper... or eliminate the barrier.. while ensuring the costs are fully borne by those imposing them, and not simply reimposed as additional cost on those they are intended to harm.