NYSE Changes Press Release Rules
A quick post today about some of the rule changes that are occurring in the major financial markets. First, the NYSE is finally updating their policy on information dispersal for listed firms to match that of the SEC's. Previously the NYSE required firms to distribute their news via email or fax to Bloomberg, AP, et al. Now firms will be able to disseminate information by an Regulation FD compliant method. Now corporate websites will be sufficient channels of communication, which is simply common sense given today's communication capabilities.
NASDAQ had already enabled enacted similar rules. Additionally, NASDAQ has enacted a number of rule changes resulting from the current economic conditions. For example, firms will now have to be trading below the delisting threshold for 30 consecutive days and once that occurs will have 180 days to regain compliance.
For a comprehensive description of all of NASDAQ's changes, click here.
Thursday, April 16, 2009
Thursday, April 2, 2009
FASB Rule Changes
The FASB rule changes adopted today are very interesting. In case you missed it, the changes, allow the assets to be valued at what they would go for in an "orderly" sale, as opposed to a forced or distressed sale.
I find this interesting because this seems to be contrary to the spirit of transparency. If I understand this correctly, under the new rules banks will essentially be able to make up whatever valuation they find appropriate instead of using information from the markets. It seems to me exactly the kind of mistake you can expect to be made in a crisis. Congress pressured FASB to make this change with the hopes that increased valuations would provide banks more capital to make more loans. Of course, the problem it creates is that if banks are allowed such discretion to value assets we open ourselves up to even more shenanigans in the future.
It is somewhat tangential to investor relations, but we at Target 3 believe that transparency is, on the whole, a good thing.
I find this interesting because this seems to be contrary to the spirit of transparency. If I understand this correctly, under the new rules banks will essentially be able to make up whatever valuation they find appropriate instead of using information from the markets. It seems to me exactly the kind of mistake you can expect to be made in a crisis. Congress pressured FASB to make this change with the hopes that increased valuations would provide banks more capital to make more loans. Of course, the problem it creates is that if banks are allowed such discretion to value assets we open ourselves up to even more shenanigans in the future.
It is somewhat tangential to investor relations, but we at Target 3 believe that transparency is, on the whole, a good thing.
Thursday, March 26, 2009
Geithner: Comprehensive Reform
Treasury Secretary Timothy Geithner recently testified to congress about the need for "comprehensive reform" in the financial system. Among some of the specifics he asked for are a regulator to oversee the financial system and hedge funds needing to register with the SEC.
The question of how this affects investor relations is more unclear of course. Changes like these probably will have little to no effect on short term IR practice. However, if the financial system is stabilized that is always good for firms looking to participate in the capital markets.
This raises the question of whether reforms more directly related to the practice of investor relations are coming. My guess is that we won't see any major changes for a while in reporting rules. There is just too much on the plate of regulators nowadays. Rather, news such as this needs to be most importantly viewed in terms of what this does for investor confidence.
It seems that the recent trouble caused by AIG and the over-leveraged investment banks has created an appetite for more regulation in the markets. Perhaps the recent uptrend in stock prices can be viewed somewhat as an agreement with Mr. Geithner's position.
Personally, I welcome changes like this. The sooner confidence can be restored, market efficiency will improve and the investor relations challenges facing many small pubic companies will become that much more manageable. Now is as good a time as ever to confront those challenges head-on.
The question of how this affects investor relations is more unclear of course. Changes like these probably will have little to no effect on short term IR practice. However, if the financial system is stabilized that is always good for firms looking to participate in the capital markets.
This raises the question of whether reforms more directly related to the practice of investor relations are coming. My guess is that we won't see any major changes for a while in reporting rules. There is just too much on the plate of regulators nowadays. Rather, news such as this needs to be most importantly viewed in terms of what this does for investor confidence.
It seems that the recent trouble caused by AIG and the over-leveraged investment banks has created an appetite for more regulation in the markets. Perhaps the recent uptrend in stock prices can be viewed somewhat as an agreement with Mr. Geithner's position.
Personally, I welcome changes like this. The sooner confidence can be restored, market efficiency will improve and the investor relations challenges facing many small pubic companies will become that much more manageable. Now is as good a time as ever to confront those challenges head-on.
Welcome!
Welcome to the new Target 3 Communications blog. We will be using this space to address the topical issues of the day. If you have any questions please feel free to contact
Jeff@target3.com or
Jerry@target3.com
Thanks!
Jeff@target3.com or
Jerry@target3.com
Thanks!
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