We’ve noted that these provisions would help multimillion dollar companies avoid modern disclosure requirements while making it more difficult for the SEC and outside watchdogs to understand this vital information.
In recent years, the Obama administration — in the form of the president’s open data executive order — and Congress — in the form of the DATA Act — have worked to move the ball forward toward machine-readable, structured data throughout government information generation and collection. If Congress and the president move to exempt companies from submitting financial statements in an open, machine-readable format, it will represent a major step backwards from the gains both have made over the past few years.
Perhaps more importantly, the SEC has taken steps in recent months to embrace open, modern data practices. If Congress passes H.R. 5405 with this exemption intact, the SEC will be hindered in its efforts to move beyond the paper age, ensuring that it continues to be nearly impossible to effectively track and understand the financial situation at the majority of public companies in the United States.
H.R. 5405 is being considered “under suspension of the rules,” a label normally reserved for noncontroversial bills that require little debate and are voted for by an overwhelming majority.
When this legislation was passed under suspension last year, it garnered significant opposition. It is far from noncontroversial and deserves to be debated in the open — not slipped through without notice.