Time It Right: The Importance of Financial Calendars

September 25, 2014

By Hannah Kelly, Business Wire Paris

What is a financial calendar?

A financial calendar (also referred to as an economic calendar) is used by traders, shareholders and the media alike, in order to track the important events of the economy. The majority of the time, this is to check for market-moving events, such as monthly jobless claims, factory orders and debt auctions which are all found in the economic calendar. Several high-profile sites such as Bloomberg and Forex publish release dates for forthcoming economic reports each week.

Bloomberg Editorial Calendar

Each audience segment utilizes this information in a different fashion. A trader for instance, may implement a specific strategy based on the proposed outcome of a report, while a newsroom will adjust their coverage and focus, based on that same report.

Why is the calendar important for public companies?

Companies use the economic calendar in order to avoid scheduling conflicts with their conference calls, investor days, and other important events. The calendar is vital in anticipating workload, keeping to a schedule and keeping everyone up-to-date and informed.

However, in addition to following the economic calendar, companies should also be aware of the dates and times of companies within their respective industry – you wouldn’t want a top analyst to have to choose between your company and your top competitor. Best practice is to try and schedule the event close enough but not so close that an analyst or reporter cannot cover both.

How should the calendar be used as a tool when a company is setting up their next event?

Press releases:  Many traded companies choose to note key dates in certain press releases, which works excellently. Those who read your first quarter results will likely be reading the next quarter, so why not quickly mention their publication date?

Investor HQ:  Here at Business Wire, we offer InvestorHQ, a web-based content management system that allows clients to manage a search-engine optimized online newsroom. Since InvestorHQ  is a CMS (content management system), events can be posted simply by entering the date, time and location. Audio and visuals can be also be added to the calendar, and email invitations can be sent with a link to the Event page, through which investors can register and receive reminders for that particular event.

No more excuses – no matter how big or small your company is, the financial calendar should play an essential role in scheduling your next event!


Decoding the 2014 Global Trends in Investor Relations

March 21, 2014

By Farah Merchant, Global Disclosure Specialist, Business Wire

BNY Mellon, a global leader in investment management and investment services, conducted its ninth annual Global Trends in Investor Relations survey in late 2013. Nearly 700 companies from 63 countries ranging in different market capitalizations and industry sectors participated in the survey.

Below are some interesting takeaways from this year’s survey:

  • The survey showed that only 27% of quoted companies globally are using social media to communicate with investors. Companies by-in-large reported not adopting social media because of “lack of investor demand” (61%). Other reasons were that management did not see the value of using social media (37%) as well as insufficient resources (33%).
    • The only region that showed an increase in social media use as an IR tool was in Western Europe, where 45% were reported using social media, an increase from 32% the previous year. Developed Asia, on the other hand, was the most reluctant region.
    • Twitter, StockTwits, Mobile Apps and Facebook were the more common social media platforms used, while other social media channels, such as LinkedIn and YouTube have shown a decline in the past few years.

BNY Mellon: Companies not using social media

  • Another trend from the survey is the changing influence of financial media. Most companies still recognize the importance of global financial newspapers such as the Financial Times and The Wall Street Journal but increasingly acknowledge that professional investor news services leveraging on-air or on-line environments such as Bloomberg and Reuters have more influence on their current and prospective investors.
    • More than 84% of respondents (an increase from 58% in 2012) rated Bloomberg and Reuters as the most influential outlets while 52% declared the Financial Times and the Wall Street Journal to have the most influence.  Another area of growth is investor-generated media, the likes of Seeking Alpha and Motley Fool, which surged from 5% to 15% from 2012 to 2013.

BNY Mellon:  What Media Outlets Matter to IROs and Investors

  • One final point I found interesting was the growing focus on expanding one’s shareholder base worldwide.  Nearly two-thirds of the Western European companies surveyed said their top goal in 2013 was to diversify their shareholder base internationally. The same could be said for Emerging Asia and the Middle East too.
    • In what could be perceived as a contradiction, more than one third of the companies surveyed admitted they do not distribute financial result press releases internationally.  Also, very few investor meetings and conferences were held outside home markets.

BNY Mellon: Growing International Shareholder Base

The landscape of IR is constantly evolving and the results of this survey reflect these changes.  IR professional’s need to continue evaluating the tools available, from new and existing social media platforms, to more traditional engagement methods such as press releases and investor meetings. Staying on top of trends in the global marketplace, and using all the tools available are essential for an effective IR strategy.

To read the full report, Global Trends in Investor Relations 2013: A Survey Analysis of IR Practices Worldwide, Ninth Edition, click here.


Investor Thoughts on the SEC’s Proposed Disclosure Reform

February 13, 2014

By Farah Merchant, Business Wire

SEC Chair Mary Jo White recently issued a staff report to Congress on disclosure reform initiatives.  The report, mandated by Congress in the 2012 Jumpstart Our Business Startups (JOBS) Act, offers an overview of the SEC’s Regulation S-K.

Regulation S-K pertains to disclosure, and first applies to companies upon IPO that register with the SEC using form S-1, and refers to ongoing reporting requirements in Forms 8-K and 10-K.

SEC reportWhite’s primary concern is the risk of information overload to investors, and she defined information overload as, “a phenomenon in which ever-increasing amounts of disclosure make it difficult for an investor to wade through the volume of information they receive to ferret out the information that is most relevant.”

She believes the guidance needs to be updated as there is repetition in disclosure, where certain items appear in more than one section, i.e., information on legal proceedings that appears in its own section but also in the notes to financial statements, risk factors and MD&A.

White addressed the need for input from market participants for the following proposed recommendations:

  • Recommending that companies file a “core document” or “company profile” with information that changes infrequently (needs to be reworded)
  • Amending the filing process by streamlining and simplifying disclosure requirements to reduce administrative costs
  • Researching ways to enhance the presentation and communication of information; and to use technology to address these issues

Click here for a copy of the full SEC report.

Is less disclosure more helpful or harmful to investors?

According to a recent Fortune article, the early opinion on the street is that although the disclosure requirements of the SEC may need an updated and possible streamlining, the information currently available is useful and helpful.

Although it may be true that not all investors read a filing in full, there are many that do, as the full filing provides insight on investment and voting decisions. By having more information available, investors feel that they can be more diligent in assessing risks. If nothing else, the recent financial crisis has taught investors a valuable lesson and that is to be more informed, more educated and to not discount risks.

So already we have a difference of opinion. On one hand you have the SEC looking to ‘simplify’ their disclosure process, with the possibility of reducing the amount of information necessary for companies to meet disclosure requirements. On the other hand, you have the street, which at first blush is more than happy with the amount of content and would be happy to receive even more granular details.

So where do you stand on SEC disclosures: More, less, or just right?


The European Commission’s Stealth Decision on Transparency:

November 9, 2011
For publicly listed companies, transparency is not an option — it is an obligation.
by Neil Hershberg, Senior Vice President, Global Media

Neil HershbergThe European Commission said as much when it implemented its harmonized pan-European disclosure standards for the 27-member European Union in January 2007. The compliance guidelines were aptly titled:  the Transparency Obligations Directive ["TOD"].

Therefore, the European Commission’s puzzling proposal to make interim management statements and quarterly reports voluntary for all EU issuers is beyond baffling. And given the global market machinations attributable to the roiling European debt crisis, the timing of the Commission’s diffused disclosure requirements couldn’t be worse.

Perhaps most upsetting of all, the Commission’s decision to truncate its transparency criteria for all EU issuers was apparently arrived at in a stealth manner.

In the way of background, the European Commission held public consultations on its plans to “modernize” the four-year-old TOD in the spring of 2010.

A key focal point of the discussions was the desire by SMEs (small and medium-sized enterprises) for relief from “the administrative burden” associated with trading on regulated markets.

Large-cap companies quickly capitalized on the opportunity,  arguing that they too were overwhelmed by the statutory requirements and lobbied to be similarly exempt from quarterly financial filings.

Most market observers dismissed the outcry by large-cap companies as simply an attempt to latch on to a market reform movement that was gaining momentum. Few, however, believed that large-cap companies would be included in any revamped reporting requirements.

Some 16 months after the original consultation period, and without any further debate or notice of its intentions, the European Commission announced its surprise retrenchment proposal, abolishing the requirement that public companies publish quarterly financial information.

The Commission did the unthinkable, effectively waiving the need for all listed companies, regardless of size, to issue quarterly reports. Under the revised landscape, companies are only obligated to file half-year and annual results.

In retrospect, the Commission took the easy way out. Faced with the challenge of identifying qualifying SMEs, particularly with fluctuating market valuations, was too daunting a task. The Commission decided to take the path of least resistance: throw out the transparency thresholds for all issuers in the name of cost-efficiency.

The reality of the situation is that cost of regulatory compliance is extremely reasonable, especially when weighed against its capital market benefits. These include greater visibility and liquidity, less volatility, and higher trading volumes, all of which are likely to contribute to a lower cost of capital.

Services such as Business Wire offer flat rate annual packages that are very competitively priced, enabling issuers to effectively control costs, while ensuring broad, simultaneous distribution to the full range of market participants.

Under the Commission’s proposal, companies can still file quarterly reports and interim management statements at their own discretion. There is no longer a mandate for companies to do so. The investment community, and the financial markets, will be ill-served by the Commission’s short-sighted decision.

Ironically, many observers think that the majority of companies will continue to update the marketplace on a regular basis. Most companies recognize that to limit market communication to semi-annual updates simply doesn’t make sense. The value of an effective investor relations program that, by definition, includes regular updates on corporate developments, has been well documented by independent academic studies.

So while many market professionals anticipate minimal consequences from the Commission’s decision, it clearly sends the wrong message to the marketplace.

The global markets remain as fragile as ever, with investor confidence teetering as the world holds its breath waiting to see how the European debt crisis plays itself out.

A major lesson learned from the 2008 financial markets meltdown has unfortunately been quickly forgotten by some market regulators.

Information is the lifeblood of our financial markets. Stanching its flow, in the name of relieving the “administrative burden” on listed companies, is a tremendous disservice to the investment community, and needlessly substitutes risk for reassurance.

With the European Union seemingly on the brink, the European Commission’s proposal to dial back on disclosure sets a dangerous precedent that desperately needs to be reversed.


NASDAQ as SRO: An Oxymoron

October 10, 2011
by Neil Hershberg, Senior Vice President Global Media
 
Neil Hershberg
Neil Hershberg, SVP – Global Media

As a “Self-Regulatory Organization,” NASDAQ is proving to be a poor role model in terms of policing its own policies.

NASDAQ has twice promised the SEC that it would refrain from the unfair and controversial practice of “bundling” its IR Services, e.g. wire distribution and IR web sites, with its listing fees. Yet despite these repeated assurances — concessions made to extract approval of several hefty listing fee hikes — NASDAQ has continued to engage in its anti-competitive practices, blatantly ignoring its compliance commitments.
 
Hence, today’s problematic paradox: in its pedestal role, NASDAQ seeks to portray itself as a bastion of free enterprise, and patron of fair and open competition. When it comes to its own commercial dealings, however, NASDAQ clearly doesn’t practice what it preaches. NASDAQ’s self-serving actions confirm that it is anything but the paragon of capitalism that it purports to be.
 
And, in an act of unquestionable hubris, NASDAQ is now asking the SEC to approve its predatory practices:
 
http://www.sec.gov/rules/sro/nasdaq/2011/34-65324.pdf
 
NASDAQ is apparently seeking to parley the SEC’s recent approval of a change in the NYSE’s Listed Company Manual to rationalize its own proposed rule change. In reality, NASDAQ’s filing is its latest gambit to distort the dynamics of the marketplace, and to leverage its subsidiary holdings to gain an unfair competitive advantage.
 
The key difference between the SEC’s newly approved Section 907.00 in the Big Board rule book and NASDAQ’s rule change request is that the NYSE is recommending independent vendors to its listed companies. Conversely, NASDAQ’s proposal is entirely predicated on its sibling subsidiary’s wholly-owned service offerings, which collectively operate under the “Corporate Solutions” banner. Once the complimentary period expires, all future profits will go straight to NASDAQ’s parent company’s bottom line.
 
This systemic vertical integration provides NASDAQ with the pricing flexibility to artificially manipulate the pricing structure of its offering to the detriment of the entire IR services industry. It makes a mockery of the principle of fair competition, which is especially troubling given NASDAQ’s perceived Olympian stature in the free enterprise system. 
 
Does the SEC really want to be seen as sanctioning NASDAQ’s “stacked deck?”  We certainly hope not, as Americans’ confidence in the nation’s financial system is already seriously challenged.
 
NASDAQ’s opportunistic overture strains credibility on several levels.
 
NASDAQ trumpets that issuers are not obligated to take advantage of its complimentary services; the clear implication is that competition won’t be compromised.
 
Yet, NASDAQ itself says it is compelled to offer NYSE-listed companies complimentary services because the Big Board offers comparable services.
 
This is a tacit acknowledgment that companies are reluctant to forfeit these free services; instead, these “no-cost” services are a powerful incentive for issuers to remain with their current providers.
 
In other words, NASDAQ’s claim of open competition exists in name only.  Budget-conscious issuers are extremely unlikely to pay for services that are freely available. And that means that rival IR service providers are unfairly elbowed out of the process. NASDAQ’s strategy seeks to divert the IPO pipeline to its sister service providers, effectively stanching the future lifeblood — and growth potential — of the IR service industry at large.
 
Furthermore, NASDAQ attempts to rationalize its rule change request by saying that a comparatively small number of issuers will be eligible to participate in the program. This is a vacuous argument that is indicative of NASDAQ’s cynicism in raising the bundling issue in yet another guise.
 
NASDAQ’S rule change request is its latest ploy to “tie” its corporate services to listings.  The SEC has repeatedly rebuffed NASDAQ’s past efforts at bundling its services. NASDAQ’s recycled proposal seeks to provide a cloak of legitimacy to an anti-competitive practice that has failed to survive previous SEC scrutiny.
 
The SEC’s decision should not be influenced by NASDAQ’s understanding of the number of affected companies; rather, its decision should be solely based on the merits of NASDAQ’s proposal. And if market fairness is the one of the ultimate criteria, then the evidence clearly dictates that NASDAQ’s rule change should be rejected.
 
Following is the text of Business Wire’s comment letter to the SEC on NASDAQ’s rule-change proposal:
 
http://www.sec.gov/comments/sr-nasdaq-2011-122/nasdaq2011122-1.pdf
 

Canada Gets it Right on Fair Disclosure — Again

March 18, 2011
by Neil Hershberg, Senior Vice President, Global Media

Neil HershbergThe United States is often thought of as the global disclosure leader, but the truth is that there is a lot we can learn from our next-door neighbor: Canada.

In Canada’s typically unassuming way, the Canadian regulatory model has been adopted as the de facto prototype for the disclosure regime that has taken root in the United Kingdom and the European Union.

I’ll elaborate on the background as to how this all came about shortly. What’s important, however, is to spotlight the reasons why global regulators have come to recognize Canada’s disclosure framework as a world-class model worth emulating.

The Canadian Investor Relations Institute [CIRI], a widely respected association of industry professionals, has just updated its “Standards and Guidance for Disclosure and Model Disclosure Policy,” to reflect the regulatory and accounting changes, social media, and other factors that have transformed the investor relations landscape since its guidelines were last modified in 2006.

CIRI’s authoritative “Best Practices” resource for reporting issuers and industry professionals reinforces the central role of a simultaneous, broadly disseminated news release in achieving full and fair disclosure.

Unlike the United States, where the term “disclosure standards” is rapidly becoming an oxymoron, Canadians are crystal clear in what constitutes fair disclosure.

According to the timely disclosure policies of the TSX Exchanges and the CNSX, a full-text news release disseminated via a sanctioned news service is the only acceptable way to disclose material information. No ambiguity here. While the U.S. trumpets full and fair disclosure in principle, Canada practices it daily as a matter of regulatory policy. The result is that the entire investment community benefits from a level playing field. (Note: Business Wire is one of several approved news dissemination services in the Canadian marketplace.)

CIRI’s guidelines take a pragmatic approach to the arsenal of available investor relations tools that greatly facilitate investor outreach.

The CIRI report specifically notes that standalone web postings, conference calls, and other complementary communications channels do NOT meet Canadian disclosure requirements. Issuers, however, are encouraged to use additional delivery platforms to supplement a simultaneous, widely disseminated news release.

“As material information should be released in a manner designed to reach the widest public audience possible, including individual investors, companies are encouraged to use various technologies to supplement the news release. Some of the most obvious technologies include conference calls, webcasts, email, fax, video conferences, company websites, and more recently, corporate blogs, RSS feeds, podcasts, and social networking sites. While new technologies are important and useful ways to disseminate information, they are not substitutes for a broadly disseminated news release.” [CIRI Standards and Guidance for Disclosure, Page 18]

Talking about disclosure, Business Wire is the sponsor of  CIRI’s ‘Standards and Guidance for Disclosure and Model Disclosure Policy.”  To be clear, however, our involvement in the project came after CIRI completed its revisions; we in no way influenced CIRI’s research or conclusions. Business Wire is proud to support the activities of CIRI, NIRI, and other investor relations organizations worldwide that promote professional development of IR practitioners, and the ideal of effective disclosure.

Now, back to our story.

The London Stock Exchange went public in 2001, a decision that forced the LSE to relinquish its monopoly on regulatory news dissemination via its subsidiary, The Regulatory News Service [RNS].

The Financial Services Authority, the UK equivalent of the SEC, used the opportunity to rethink its approach to regulatory disclosure.

The FSA formed the Information Dissemination Advisory Group (“IDAG”), a committee of industry participants and outside experts to study various models and scenarios. IDAG was charged with making its recommendation to the FSA as to the UK’s future regulatory structure.

FSA officials also crossed the pond to North America, where they conducted extensive interviews with a wide range of market participants in the United States and Canada, as well as to conduct their own  observations, research and analysis.

After completing its due diligence, the FSA ultimately embraced a competitive disclosure regime whose nucleus closely mirrors the key tenets of the Canadian regulatory system.

Soon after the UK model went live in 2002, the European Union began a similar exercise — and not surprisingly, concluded with virtually identical results.

The Committee of European Securities Regulators (CESR) exhaustively evaluated a range of disclosure options over several years. CESR’s final assessment, memorialized in the Transparency Obligations Directive that took effect in January 2007, once again ratified the core Canadian/UK disclosure model as the best of all possible worlds.

With its characteristic low-key style, Canada deserves to finally be recognized as a  regulatory role model whose commitment to full and fair disclosure sets the standard for leading global financial markets.


NIRI National Sessions Miss the Mark on Disclosure

June 14, 2010

– by Michael Becker, SVP, Financial Product Strategy

Michael Becker

In my humble opinion, the 2010 NIRI National Conference was a tremendous success, albeit in one area.

The annual conference committee’s courage to tackle hot button issues like the SEC’s Regulation FD Interpretive Guidance is commendable.  However, in its zealousness, I believe attendees were over-served FD, often by ill-informed “experts” and biased parties.

Ill-informed experts and biased parties speaking at NIRI National? Why, yes.

Daniel Kinel of Harter Secrest & Emery LLP, in his session “Fair Disclosure and the Web,” stated that a six-minute delay between web-posting and an 8-K was “simultaneous enough.”  (As an aside, I approached Mr. Kinel and explained why six minutes at 4:00 pm ET is a wide gap — i.e., after-hours trading.  His response: “Good point.”)

How about James Moloney of Gibson, Dunn who believes leveraging notice-and-access news release disclosure for earnings can save an issuer $40 – 50K annually?  (Mr. Moloney, ever heard of a Metro distribution?  It’s only $210).  Mr. Moloney also discussed the newswire upload process, calling it an extra, cumbersome step.  That is a pretty myopic view coming from a person who is paid to protect his clients.  The extra step ensures that material news content is vetted, secure, error-free, properly formatted and disseminated to the markets in a ubiquitous manner.  My hunch: Mr. Moloney will be busy when issuers self-publish content via WYSIWYG tools with errors (spelling, formatting, etc.).

While the web is assuredly more important for issuer communications than ever before, I do not believe there has been a seachange since the late-2008 survey that found securities attorneys favor wire services over corporate web sites for disclosure of material news. Maybe the Moloneys of the world see the Reg. FD Interpretative Guidance issue as a way to increase billable hours? Furthermore, research has shown greater dissemination improves stock liquidity and lowers volatility while enhancing a firm’s visibility; it can even lower the cost of capital.

Finally, how about ThomsonReuters, who spent a pretty penny on its lunch session, just to tell issuers how disseminating to a handful of distribution points via its mechanism is best practice? (I liken it to telling my son to strive for a C because it’s passing.)

It’s one thing to discuss a topic openly in a transparent manner; it is entirely different when NIRI members are plied with inaccurate information over the course of multiple redundant sessions.  For a more accurate look at what NIRI members really feel constitutes proper disclosure, see Neil Hershberg’s recent entry, “Common Sense in Investor Relations.”

In closing, I am young, hungry and ambitious. There is no way I would hitch my wagon to an antiquated business model. Furthermore, I am a realist when it comes to the technology adoption curve and genuinely believe if/when the time comes that another model for material news distribution is better for issuer communications, Business Wire will be right there, doing what we have done for 50 years, evolving to suit the needs of our customers.

Until then, take a step back, look past the self-interested zealots and see the forest for the trees; traditional newswire services today provide the single best method for satisfying Regulation FD disclosure. PR Newswire’s long-time consultant Mark Hynes states it best: “If I believed that they were making buggy whips, I wouldn’t be there.”


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