Regulators in Canada hamper
investors’ information access
Canada’s equivalent of
the U.S.’s EDGAR filings repository has
decided to make it just a little harder for
investors to access filings.
Investors now have to type in a security
code (known as a captcha)
before they can access any filing.
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new code screen implemented in early 2006
creates an additional and unnecessary barrier. |
While this might seem like a small irritant,
it is not. It is another reason for investors
and public companies to avoid making use of
Canada’s SEDAR repository, which
is outsourced to the Canadian Depository for
Securities (CDS), a private company controlled
by Canada’s banks and investment dealers,
but regulated by the country’s securities
commissions and its central bank.
When you add the captcha requirement to the
fact that all SEDAR filings are hard to use
in the first place because they’re in PDF
Blobs, then this additional barrier to information
is one more reason for investors to avoid using
SEDAR.
The new requirement also acts as a disincentive
for companies to provide direct links to
individual filings. Such links save investors
the time of digging through reams of poorly
labeled and unsorted files in the regulatory
database to find documents like prospectuses.
What is baffling is that there is no good
reason for the captcha requirement. It is
purely a tactic to protect CDS. They are making
their own internal issues everyone else's problem.
Like registration requirements, captchas should
only be implemented when users want to obtain
a priviledge or benefit, such as to post a public
comment or to obtain something they are not
automatically entitled to. They should never
be used when users have a right to the information
or service.
SEDAR is part of the investor protection system
in Canada. It should be an open, accessible
and public database. Rather than hamper
access by disallowing direct links to filings
and putting up barriers to access through security
codes and poor formats, Canadian regulators
should be forcing CDS to do everything possible
to broaden SEDAR’s appeal and flexibility.
CDS has bungled this project several times
over the years. Each time, the problem is the
same. CDS puts its own misguided commercial
sentiments ahead of the investor protection
objectives of the repository. They should be
fired from the job of maintaining SEDAR or be
brought back into line by the regulators.
If you have links on your website to invidual
SEDAR filings, you should check that they still
work. Since CDS made the changes, some links
may be leading to a warning page on SEDAR
that implies you and your site’s users
may be doing something illegal.
This is the notice we got when we tried to
access a prospectus directly from TD Bank’s
IR Website recently:
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ACCESS
DENIED
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CDS INC. (CDS)
operates the SEDAR.com Web site on behalf
of the Canadian Securities Administrators
(CSA).
CDS analyses SEDAR
Web site utilization on a regular basis.
The IP address registered to you and/or
your company exhibits what CDS considers
to be excessive and unauthorized use of
the SEDAR Web site.
CDS has three
main concerns, one or more of which apply
to the activity engaged in by this IP
address:
* that this activity
may have a damaging impact on service
to members of the public and other intended
users
* that this activity may represent preparations
for a denial-of-service attack on the
SEDAR.com Web site
* that this activity is in serious breach
of the terms and conditions governing
use of the Web site (see below), and may
be attempting to secure SEDAR data for
commercial gain.
CDS must ensure
that the SEDAR data and information entrusted
to us is put to its intended use, and
that we maintain our required levels of
service and security for members of the
public and regulatory authorities alike.
If you wish to
discuss continued access to the SEDAR
Web site and SEDAR data, or if you wish
to receive a copy of the full Terms &
Conditions of Use, please contact David
Scott at dscott@cds.ca.
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Yikes! And we just wanted to access an original
prospectus.
If your site links to individual documents
on SEDAR, then move those documents to your
own server rather than force people to go
through the repository's security code process.
In this age of electronic communication, and
with other regulators in the U.S., Europe and
Japan, talking about implementing advanced technologies
like XBRL, it is high time Canada's regulators
took the Web seriously.
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