Web site records important to new Reg. FD web disclosure

13 November 2008

By Catherine Crofton



The new Reg. FD guidance governing web disclosure?has underlined the importance of the corporate web site as a primary source of information for investors and the capital markets. As more issuers look to fully leverage web technologies to meet compliance requirements, the need for integrated disclosure controls and comprehensive records becomes increasingly important.

Determining the best approach to these requirements should not be something delegated to the web master or IT department (although they will ultimately be involved). These are communications, compliance and risk management issues – requiring the involvement of Corporate Legal Counsel, Investor Relations and the Disclosure Committee.

Strong disclosure controls & procedures, supported by consistent, thorough and searchable records is an issuer?s best defence in the wake of a regulatory inquiry. To reduce risk and liability, records should be able to demonstrate due diligence by documenting:

  1. what was on the web site at any given point in time (including all downloads, presentations and information? populated through data feeds)
  2. the accessibility of the content (to illustrate that negative information wasn?t ?buried?)
  3. the full chain of approvals/timelines for information posted to the site

There are several ways that issuers try to capture and maintain records of their web site disclosure including:

Real Time Records & Audit Trail ? This method records each change and associated approval in real time, as changes are made to the site. Information is captured in a verifiable, time-stamped audit trail enabling you to instantly access each specific change, when it was made, who made it and who approved it. The system allows internal users to report on all changes and enables the instant recall of fully functioning web site duplicates from any point in time.(See below – Q4 WEB’s proprietary ? time-shifting feature, which allows you to specify date and time? in order to recall historical versions.)


    Manual Approach ? Many companies try to maintain records by capturing screen grabs (pictures of web site pages) and then filing these along with Word, PowerPoint and PDF versions of web site content. Manual records do not include information updated through data feeds and do not provide the location or complete context of how information was presented, Manual processes are error-prone and reliant on specific individuals. Using this approach to capture and maintain web records makes it difficult to ensure accuracy and completeness.. This method is very labor intensive, difficult to report on and does not adequately address risk.

    Site Scraping ? An alternate to screen grabs is to implement site scraping software to visit your site on a pre-determined time scale and copy all of your content. The challenge here is that scraping must happen on a pre-determined time scale (i.e. every month) whereas content can be on and off a site in minutes meaning the record may not be reliable. It also means a high likelihood that site changes will not be accurately time-stamped, which is critical in a due diligence defence. As well, this approach does not tie the copy of the site with the Audit Trial, therefore necessitating a reconstruction after the fact. In addition to increased time and costs, accuracy is questionable.

    Content Management Systems (CMS) ? the majority of web content management systems (CMS) on the market today provide some level of content versioning. Depending on the cost and sophistication of a each system, this ?version? can range from simply the prior version to every prior saved version of a page. This type of versioning was designed to provide internal users with the ability to roll-back to a previous version of a page. The problem with using a standard CMS for web site records is that these systems were not designed for compliance risk management and ?do not capture all web site content ? instead they capture only the page content. This means that items such as data feeds, documents, images, downloads and multi-media are not captured in the same record.? As well, there is no record of how the information was displayed on the site (meaning no way to demonstrate information was not buried).

    Combinations of the above – It is possible to combine the options above to create a fairly accurate web site record. For instance using Site Scraping along with a CMS has the ability to generate both a record of the site and the evolution of the main content. The challenge however, is the manual steps to combine each of these record sets into some type of searchable system.

    IR Template Solutions – IR template solutions often do not provide versioning of any of the site content. Because these solutions are primarily outsourced service offerings, rather than technology solutions, they provide virtually no record or audit trail of the web site. Instead, these solutions rely on back-up tapes of previous site versions which require extensive manual efforts to reconstruct information and in many cases do not provide an accurate chronological history of content changes.

    Download?Full Article (PDF 375k)?

    Many issuers we?ve spoken with believe that their current approach to capturing and maintaining web site records is more accurate and comprehensive than it really is. As your company moves toward a Reg. FD web disclosure model, a closer examination of this is imperative. To learn more about how to implement appropriate web site controls and records using Q4 WEB or to discuss your current approach, please email us or call 1-877-426-7829 ext. 225.



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