When regulators are dunces

By Dominic Jones

LONG-TIME readers will know I dislike most regulatory filings databases because they lack the basic usability needed for the public to actually use them.

The best of breed right now is the U.S. Securities and Exchange Commission’s Edgar database, but even the SEC thinks it could be better. It is spending around $50 million over the next little while to make it more extensible.

My least favorite regulatory databases are the Canadian ones — SEDAR, for general company and mutual fund filings, and the terminally ill SEDI, which is the insider trading repository that is being overhauled after widespread complaints (cross your fingers they get it right the third time).

But here’s what really bugs me right now about the SEDAR database. To access company filings, investors have to type in a CAPTCHA code. I did that just now as you can see in the screenshot below.

So I dutifully fill in the letters and, like everyone else, I don’t bother reading the disclaimer before I click “Accept.”

And I immediately get an error page. It won’t let me view the filing because I didn’t enter the code correctly. The CAPTCHA is case-sensitive, which in itself is highly unusual. So I didn’t notice that the “p” is capitalized. Or was it the “u”? Or both?

This happens to me at least every second time I visit SEDAR, which I try to avoid doing because I don’t enjoy the experience, and not just because of the code barrier.

From what I can tell, the CAPTCHA is being used solely to prevent third-parties from harvesting information from SEDAR and disseminating it on the Web. It has nothing to do with protecting investors.

They want to stop third-parties from taking the information filed on SEDAR and providing a better user interface for it or making it more accessible. Why do they want to stop that happening? So that the Canadian Depository for Securities, which has the contract for administering the database, can protect its patch and sell the same information companies are paying to provide in the first place.

Widespread access and distribution of disclosures is something regulators should being trying to encourage, not discourage. The more access investors have to regulatory filings presumably the better informed they will be. And informed investors make fewer mistakes and are less easily fleeced.

CAPTCHAs are a bad idea, period. They don’t do anything except create barriers for users. The obstacles can be insurmountable for some people. Shareholder.com is guilty of using them on its hosted IR websites, which tells you something right there.

If the regulators and their agent have a problem with unauthorized third parties reusing SEDAR content, they should find another way to address the issue instead making their problem everyone else’s.

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