Most of us probably believe that in many instances, regulatory overload has gotten out of hand. Now comes Paul S. Atkins, Chairman of the US SEC, proposing to implement simpler disclosure rules. Investors should watch, and be prepared to applaud, if Mr. Atkins actually succeeds in promulgating revised regulations that are rooted in financial materiality and relate to a company’s size.
It is interesting to note that when promoting the initial federal law regulating securities in 1933, President Franklin Roosevelt explained that its purpose was “to protect the public with the least possible interference with honest business.” With the passage of time, the federal government’s natural tendency to add rules and paperwork asserted itself to obscure more than illuminate.
Investors would clearly benefit from any increase in transparency and any reduction in complexity.
All comments and suggestions are welcome.
Walter J. Kirchberger, CFA
