I think this is an important story, and the Techcrunch post by Brian Solis is a really nice piece for introducing how social media create an ecology of distribution and visibility. In other words: you can gain viewers and traffic by increasing visibility through this multiple-channel — user driven — distribution sequence.
In a nutshell, Solis reports that the SEC is set to recognize a blog post as meeting its disclosure requirements for companies’ financial reports. Traditionally, these kinds of announcements have been distributed via public relations wires, picked up mainly by reporters, analysts, and investors who are part of a small, but attentive audience. The issue has to do with Full Disclosure rules that are intended to guarantee the fairness of the market. Disclosing information to analysts or investors on a selective basis biases the market in favor of those people, and the aim of the FD rules is to prevent that in favor of more timely and transparent disclosure of financial information.
The news for Social Media is summarized in the following quote from the SEC’s announcement on rule changes in the FD regs (due to be in force October 23, 2008):
As a general matter, acceptable methods of public disclosure for purposes of Regulation FD will include press releases distributed through a widely circulated news or wire service, or announcements made through press conferences or conference calls that interested members of the public may attend or listen to either in person, by telephonic transmission, or by other electronic transmission (including use of the Internet). [my emphasis]
Why the big deal? It is official confirmation of the cost effective use of the Internet (blog posts, social media updates, even Twitter trails) in a business context, legitimizing an increasingly valuable and widely used method of communication. There will be a financial community built around this with RSS feeds, Twitter trails, and announcements through traditional email and PR distribution channels that will make this information quickly available to a much wider audience.
This is a breakthrough.