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July 6, 2009
The Lessons in the SEC Summary Prospectus Ruling
Ludwig Mies van der Rohe would be proud, as his "less is more" aesthetic is applied as an information architecture ruling by the SEC.
In its Summary Prospectus Ruling issued earlier this year, the SEC noted that the move to a summary document process, with hyperlinked access to the statutory prospectus and associated filings, would likely lead to better informed investors. At the core of this conclusion is that fact that shorter, simpler documents are more likely to get read. From an initial read, any desire for further information could easily be satisfied online.
The ruling created a win-win for investment companies seeking to cut costs since it paved a path to reduced overall production and distribution costs on regulatory mailings. But the real winner, as the SEC itself noted, was the investor.
Lightweight documents do encourage reading when compared to long, legalese-laden tomes. The statutory prospectus had become an impenetrable morass to all but the most fluent of financial readers. And like its insurance counterpart...the insurance certificate...was rearely read in full. By pulling the most critical items into a "plain English" summary then linking to more detail, the ruling creates clarity and usability.
From marketing to customer service, the SEC model for information architecture...a physical mailing trigger that connects to rich online content, is a powerful one. Its cross-media execution is a solid reminder that the online world can be confusing -- physical mail cuts through clutter well. But, for long-form information display, the online world is unchallenged -- hyperlinking is already powerful even without XBRL. And in this challenging economy, the powerful lesson of migrating print-bound media online to save money is compelling.
Who could have anticipated such a good lesson coming from a conservative government agency?
Posted by jcioban at July 6, 2009 3:11 PM
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