The US Securities Exchange Commission ("SEC") issued an interpretive release on August 1, 2008 (the "Release") that provides guidance as to how company web sites may be used to disclose information to investors in compliance with federal securities laws. The release focuses on a few specific areas of securities regulation, including Regulation Fair Disclosure ("Reg FD") and the antifraud provisions of Rule 10b-5 and Section 10(b) of the Securities Exchange Act of 1934 (the "Exchange Act")
The Release addresses four primary topics related to the use of company websites.
When company web site information is considered "public" for purposes of Reg FD
The Release sets out various factors to consider in determining whether information posted to a company website would be considered "public" for purposes of Reg FD. The Release avoids setting a brightline test, instead it provides a number of nonexclusive factors that companies should consider when determining if information on their website will be considered "public", and whether such information would satisfy Reg FD's "public disclosure" requirement. These factors include:
When company website information is subject to antifraud rules
The Release explains that the antifraud rules of the Exchange Act apply to company statements made on the internet in the same way that they would apply to any other statement made by, or attributable to a company. The Release provides specific guidance as to how the antifraud provisions may apply when investors access (1) previously posted company statements; (2) hyperlinks to third-party information; (3) summary information; and (4) interactive website features such as blogs or electronic shareholder forums.
When company web site posts should be certified by the company's officers
The Release explains that information posted to a company web site may trigger the certification requirements set forth in the Sarbanes-Oxley Act.Under the Sarbanes-Oxley act, a company's principal executive officer and principal financial officer must certify that the company has followed proper design and control procedures in preparing reports under the Exchange Act. The Release clarifies that it is unnecessary for companies to provide such certification for all material on the company web site, unless company web site is the only location where the relevant report is published.
Company web sites should be readable
While the text should be readable, the Release states that the ability to print a particular browser screen is not a necessity, unless other rules specifically require it.
Effective Date: August 7, 2008
To obtain additional information about SEC regulatory developments, please contact James Brophy (email@example.com), Tara Pauls (firstname.lastname@example.org), Jessica Benford (email@example.com), or John Carter (firstname.lastname@example.org).
 Securities and Exchange Commission Release No.s. 34-58288, IC-28351; File No. S7-23-08, 17 CFR Parts 241 and 271 (Aug. 2008).