Category Archives: IR & Compliance

The Right Thing to Do, From Any Angle: Curbing HFT Advantage

I used to live across the street from a fellow who worked for a hedge fund, writing software code designed to machine-read data and execute stock trades in hundredths of a second.   One night, as we were standing out by our mailboxes chatting, we realized that our jobs intersected, an interesting conversation ensued.

We had been talking about emerging news feed formats and the fact that he had figured out how to write code that could machine-read the news announcements about the macroeconomic events of the day (e.g. jobs reports, durable goods orders, etc.) and execute trades based upon that data – automatically and in the blink of an eye.  Our conversation soon turned towards his interest in getting access to our news feeds.

I bring this up because this conversation was similar to one of the many discussions our leaders have had here at PR Newswire over the past decade. We’ve had ample opportunity to sell our direct feed to high frequency trading outfits, and have evaluated doing so through many different lenses.  And our answer has always been no.  Today, we received some powerful affirmation from the New York Attorney General that we continue to do the right thing.

“By going the extra mile to ensure its service is not abused by high-frequency traders – at any time during the trading day and in the moments after the closing bell – PR Newswire has proven itself to be an industry leader,” said New York Attorney General Schneiderman in a press release issued today about the steps PR Newswire is taking to curb preferential access to material news  for high frequency trading firms“High-frequency traders can use information in the milliseconds before it becomes widely available to other investors, effectively skimming from the rest of the investing public. Today’s agreement is another important step toward curbing Insider Trading 2.0, and PR Newswire deserves credit for its leadership.”

The discussion about high speed trading tactics is far from over.  Numerous federal agencies, including the SEC and the Justice Department, are investigating whether HFT practices violate insider trading laws.   In the meantime, PR Newswire is expanding on its long-standing approach to fair and equitable distribution, taking additional measures to protect client and market interests by recommending that public companies disclosing material news at market close delay those announcements until 4:01PM ET to prevent same-day trading on this information.

In the wake of all the developments around HFT tactics recently, I reached out to my old neighbor, who left the trading business several years ago and now writes code for a security firm.

“I think it’s great that you guys didn’t sell your feed to the highest bidder, even if at the time I was trying to be one of your highest bidders,” he told me. “You did always have the long-game in your perspective, and that’s admirable.”

Related: 

Building Shareholder Confidence:  New York Attorney General announces unprecedented steps by PR Newswire to curb High Frequency Traders

AP: PR Newswire Imposes Use Limits on Its Data Feeds

Wall St. JournalPR Newswire to Ask Companies to Delay Late Releases to Sidestep Rapid Traders

USA Today: PR Newswire Curbs High Speed Trading 

Bloomberg BusinessWeek: PR Newswire Reaches Deal With New York in High-Frequency Trading Probe

Author Sarah Skerik is PR Newswire’s vice president of content marketing, and is the author of  the ebook  New School Press Release TacticsFollow her on Twitter at @sarahskerik.

Our Take: Wire Services & High Speed Trading

In today’s Wall Street Journal, Financial Markets reporter Scott Patterson published an article regarding the impact a press release newswire can have on High Frequency Trading (“HFT.”)  The article – “Speed Traders Get an Edge: Paying for Direct Access to News Releases Can Give a Lucrative Time Advantage”  –  is available here for WSJ subscribers.

In his article, Patterson describes how some trading firms are able to gain advantageous access to press releases issued by Business Wire and MarketWired, capitalizing on the nanoseconds that lapse as material news is relayed from the newswire vendors to the web, media outlets and trading systems.

PR Newswire’s position on the topic is clearly stated in the WSJ article:

“Business Wire’s competitor, PR Newswire, says it doesn’t provide trading firms access to its “Disclosure Feed” despite frequent requests. The company says it provides the news feed to clients with the understanding that information provided won’t be used for trading purposes.”

Our distribution technology and processes are designed to meet both the spirit and letter of RegFD, the broad, non-exclusionary distribution of our clients’ material news, and we believe it serves the best interest of our clients.

There are certain media outlets we classify as disclosure points that receive the above-mentioned “Disclosure Feed,” which delivers material information to those disclosure points, including Bloomberg, Thomson Reuters, the Associated Press and Dow Jones.   

Brokerage websites typically receive the news feed from a news aggregator, while a trader receives it via a market data provider such as Bloomberg, FactSet or Thomson Reuters.

PR Newswire has, over its nearly 60 year history, worked to ensure that our clients’ material disclosures are disseminated fairly to all parties and are compliant with federal regulations for news distribution and industry best practices. We made a conscious business decision not to sell high frequency  nor algorithmic trading firms our Disclosure Feed. We believe this decision serves the best interests of both our corporate clients and the capital markets.

Author Jason Edelboim is PR Newswire’s senior vice president of global media & distribution. 

NIRI 2012 Annual Conference images: round two > non-stop discussions about reaching investors

Sarah Skerik:

For those whose remits come dangerously close to (or in fact involve) investor relations, here is another recap from last week’s NIRI conference.

Originally posted on Building Shareholder Confidence:

The largest global assembly of investor relations professionals gathered in Seattle last week for the National Investor Relations Institute’s 2012 Annual Conference.

As you can see in the snapshots below, gather they did.

I will not speak for other exhibitors, but it seemed as though the estimated 1,400 attendees were in our exhibit booth all at once…all the time. That makes sense as we had many product updates and strategic ideas to share with both current clients and soon to be clients. : )

Discussing Capital Markets Visibility 365

Understanding web disclosure vs. REAL exposure

Explaining the finer points of quantitative targeting

Listening to clients’ needs…

… and ideas

A meeting spot for corporate partners and Canadians

“Yes, we host almost 900 IR and PR websites. Thank you for asking.”

“Yes, we’re a comprehensive financial printer too. Thank you for asking.”

StockTwits COO giving us a helping hand in the booth

View original 86 more words

IR Society CEOs Square Off at NIRI

We had some serious fun at NIRI with our Jeopardy-style Total Disclosure Trivia Challenge, and the high point was when the CEOs of NIRI, CIRI and AIRA went head to head in a thrilling IR trivia show-down.  Our thanks to IR Magazine for the video!

Setting the Record Straight Regarding Web Disclosure

A recent blog post on the IR Web Report asserted “STATISTICS from trackable links in company press releases suggest that even small companies’ websites are the most heavily used sources for financial disclosure information, and that dissemination via PR wire services is mostly ignored by investors.”  This statement simply couldn’t be further from the truth, and we believe it’s our duty to set the record straight.

Of course, both sides of the discussion have their biases and business agendas.  The author of the IR Web Report provides IR website consulting services to companies and has a vested interest in seeing more public companies embrace web disclosure. And press release distribution is PR Newswire’s core business, though we too have a thriving IR web site services division.

But agendas notwithstanding, the facts tell a different story, and reveal why fewer than a dozen public companies have made the switch to web disclosure.

A misguided characterization of press release stats

IR Web Report’s use of tracking clicks from the press release on the PR Newswire site to the issuing company site as the sole measure of traffic driven by a press release gives a very incomplete picture of the traffic generated by the message, and is, in fact, a very poor measure of how well a press release distribution worked.  Why?  The answer lies in syndication.   When you send a press release out over PR Newswire, it will appear – in full text and in many cases with the links you embedded in the copy – on thousands of web sites, ranging from financial powerhouses like Yahoo! Finance and CNN Money to a huge network of personal finance and investing sites, media web sites and blogs.   The version of your press release appearing on these sites will drive traffic to the URLs and links you included in the copy.  One needs to look at the total effect of the syndicated press release – not just the traffic referred from the newswire web site.

Don’t forget social sharing
Social sharing is another important component of press release visibility, and PR Newswire content is shared on Twitter, Facebook and LinkedIn at an astonishing rate – thousands of times each day.  Social sharing provides important and credible third party promotion and redistribution of news among audiences eagerly pursuing equities news.

In reality, a handful of companies are using web disclosure

The PR wires – PR Newswire included – remain the easiest and fastest way to comprehensively and simultaneously reach the spot news desks at Dow Jones, Reuters, Bloomberg, the AP and other financial news services, other relevant media and online audiences.

Many companies that have explored web disclosure find it’s difficult for them to make a sudden shift and begin to rely on an IT department or web staff that may or may not understand the complexities and vagaries of Reg FD the way that the wire services do.  As a result, a number of well-documented mishaps have resulted in early and uneven disclosure of financial news from companies large and small.

For these reasons, the number of companies that have switched from using press releases to relying solely on web disclosure remains so small.

The company web site really should be the financial communications hub

All that said, it’s important to note that PR Newswire is an avid proponent of delivering excellent, robust and up-to-the-second financial communications on corporate web sites.   It’s common knowledge that a company’s website is ultimately where audiences should go to find the most comprehensive and up-to-date information available related to that organization.  It’s also commonly understood that social media sites are important for broadening the reach of various types of content, but it’s the company website that should be the place where it all comes together.  On these points most IR pros – and the team here at PR Newswire – agree.

In fact, the example IR Web Report called out, Boeing, is a long-time user of PR Newswire’s MediaRoom service, which enables the Boeing communications team to manage their media site and incorporates a live XML feed of the press releases they issue via PR Newswire to ensure the news is available on their site within milliseconds of being disclosed via the wire.  This long-standing and tested solution fully satisfies the timing and accuracy requirements of Reg FD.  Multiple levels of security safeguard content until release.  PR Newswire has had thousands of companies engaged in this seamless process for many years.

For years PR Newswire has focused on automating communications processes where it makes sense to do so, enabling communicators to swiftly reach key audiences and update their web sites so they may devote their time to the higher-touch and more complex aspects of their jobs.  Along the way, we add quality control (our editors routinely catch and fix mistakes in almost 2/3 of press releases submitted for the wire) and rigorous authentication of sources that means media and web sites can trust – and immediately act upon – press releases they receive from PR Newswire.  We devote entire departments to developing audiences for investor news, and building the syndication network that delivers enormous online reach.  There’s more to press release distribution than meets the eye.  We’re very proud of the work we do and the services we provide, and we thank you for allowing us to set the record straight.

John Viglotti is PR Newswire’s vice president of investor relations products & services.

PR Newswire offers secures investor relations web sites that are easy to update, flexible and can incorporate an up-to-the-millisecond feed of your press releases.

Best practices for securing undisclosed news on your IR web site

Spiders from financial news organizations trawl web sites for news, and can find undisclosed material information that hasn't been properly secured.

A prematurely leaked earnings release is the scenario that keeps many IROs up at night, and some of the market’s biggest names have been surprised in recent months when material news they hadn’t yet disclosed showed up on the financial newswires.

In every case, the leaked press releases were posted to a public – but unpublished – section of the companies’ web sites, enabling savvy – and aggressive – news organizations to gain access to the news before its scheduled disclosure without hacking passwords, breeching any firewalls or breaking any laws.   The press releases were all posted to an unpublished web page, the URL of which was easily guessed by reporters.

Commenting on an incident in late 2010 for a Wall St. Journal blog, Bloomberg News issued the following explanation:  “We found the release posted on the company’s website without any required password or firewall. The company failed to respond to multiple calls from us to verify the information on their website before we published our story.”

“An unpublished URL doesn’t create secure environment,” said Chris Antoline, Product Manager of Web Engagement at PR Newswire.  “Posting a press release to a web page that is otherwise public is risky. People – and news spiders designed to hunt for content – don’t need URLs to find information.”

One shouldn’t rely solely upon the judgment of your company’s IT staff or a vendor – they may be unaware of how competitive the financial news reporting environment is, and the risks posed to the company.

Securing this content is not difficult, but many times your web team or vendor simply doesn’t understand the directives of IR Department or the importance of timing around announcements. A simple meeting or discussion to convey the concept of SEC guidelines around disclosure can guarantee that the web team is thinking in your best interests.

What’s NOT secure:

  • Unpublished URLs Draft or preview web pages that are not behind the firewall
  • Any URLs that might be dynamically-generated using some sort of numerical sequencing for database items, such as news releases. www.xyzcompany/about/news/1871 is NOT secure since a spider (or human) can easily add or remove a number to the URL, and pull up unpublished documents.
  • Any CMS which has security where you have not changed your password from “admin” or “login” or “password”

How to determine whether or not your practices are secure

Questions to ask your IT department or your vendor:

  • What are the security measures in place for protecting non-public content in our Content Management System (CMS)?
  • Is ‘dark’ content in our CMS able to be accessed publicly via a direct URL?
  • Does our CMS use sequential numbering for the database?
  • Can we password protect pages and content to prevent outsiders from accessing certain information which we only want a select group of people to access?

Another way to test the security of undisclosed documents is to try to access them yourself, from a home computer or smart phone that’s not attached to your company network.  If you can pull up the test document via an unpublished URL, that’s a red flag.  Others can do the same.

To secure your company’s undisclosed material information, PR Newswire suggests the following practices:

  • Be sure the proper security measures are adhered to by your CMS before publishing content that is not yet ready for the public to view.
  • Leveraging unpublished URLs can be an effective way to present content for the user experience you’re trying to accomplish on your website, but make sure all private, unpublished content is protected by a password.
  • Have your web team program the system to use non-sequential URL generators
  • Better yet, use a URL Editor, where not only do you make the system more secure but you help your SEO efforts as well.

Remember, as a publicly traded company it is ultimately your organization’s responsibility to ensure that yet-to-be-disclosed content is kept secure.  Asking a few simple yet critical questions of your internal IT team or website vendor can go a long way in saving your company time, money and even market share repairing damage that could have been prevented.

Authored by Chris Antoline, Product Manager, Web Engagement Products, PR Newswire.

Secure & Fully Featured IR Web Site Services

Looking for a secure and easy to use investor relations web site service?  PR Newswire’s web site creation and hosting tool, IR Room, helps your company organize and secure critical information for investors, analysts and media while maximizing your online presence.

Image courtesy of Flickr user The Itsy Bitsy Spider

Engaging Individual Investors: Insights into PR Newswire’s Online Audiences

A Five Part Series Based on Insights from Independent Research Firm for PR Newswire
Part Two: Getting in Front of Individual Investors

In my last blog post, I mentioned that recently PR Newswire commissioned Forrester Consulting to conduct a survey (PR Newswire: Web Site User Analysis & Opportunities, September 29, 2010) of our web audiences on PRNewswire.com and PR Newswire for Journalists (PRNJ.com).   The purpose of the survey was to understand more about our user demographics; their current habits on the web and what they were looking for in the future.

This is part two in the series of five that I mentioned in the first post.  This week we are going to have a look at the answers from our retail or individual investor audience on PRNewswire.com.

Before I do that though, I would like to share some more general demographic information we learned from our Forrester Consulting survey.  An overwhelming majority of our survey respondents, 85%, were from North America.  They have an evenly split income range with each answer (100,000+, $99,999 – $50,000, up to $49,999, and I would prefer not to answer) taking just about 25% a piece.   They are slightly skewed male and their age range is from 35 to 54 years old.

To identify the different audiences, PR Newswire and Forrester Consulting, asked users to tell us why they came to site.  Thirteen percent of our users said they came to PRNewswire.com looking for information about a company as an investment.  With investment houses using different sets of research tools, we assumed these investors were on their own.

This information matched our web analytics and past surveys we conducted without the help of Forrester Consulting, so we were not terribly surprised to know that individual investors were using our site in these numbers.  What is surprising is that 81% of the individual investors we surveyed were male and older than our general web site population and the majority at an age range of 45 to 64 years of age.  As a result of the Forrester Consulting data, we now have a pretty good persona for our individual investors.

When we asked the PRNewswire.com investor audience how they found the page they were on, 66% of them answered Google.  This speaks to the power of search engines and the visibility news releases have on the search engine optimized PRNewswire.com versus other web sites.  The Forrester Consulting survey also told us that these investors are repeat customers.  As a result of their Google habits, 62% of them visit the site on a regular basis (daily or weekly) with 38% of these investors visiting PRNewswire.com daily.

This is extremely valuable information, not only for PR Newswire but also for investor relations professional s trying to get in front of this audience.  Individual investors are not just looking for the financial media’s commentary on company’s news releases; they are looking to get the news straight from the company source as well.   So if you are in investor relations and need to engage retail investors, look no further than PR Newswire.

On tap for next week – insights from the survey on the consumer audience, including how consumers looking for product information find their way to PRNewswire.com and your press releases –  so be sure to come back and check it out.

Authored by Sandra Azzollini, Director of Online Content & Community, PR Newswire

Some Clarity on Web Disclosure, and Transparency

Today’s New York Times has an article relating to my blog post last week regarding the tenth anniversary of Regulation FD and Disclosure.  The article can be found at:
http://dealbook.nytimes.com/2010/11/08/a-lack-of-transparency-in-s-e-c-disclosure-rule/

It is great to see the mainstream press focusing on the issue of web disclosure.  While I obviously agree with the points that the article makes, the interesting thing for me is the focus on Wall Street.  While Wall Street is important here, the bigger issue is the way that uneven disclosure hurts retail investors.

Individuals who neither have the technology nor time to monitor numerous corporate web sites are at a distinct disadvantage in situations where companies use advisory releases or limit disclosure solely to their corporate websites.

As one of the people who commented on the Times article stated, "disclose means making something visible for an audience, not just making it visible." This is a key point and one that should be top of mind at all times to all who are involved in the financial communications field.  It cannot be understated.

Unfortunately, it is a message that is not always appreciated by all.

The New York Times article also quotes an unnamed corporate lawyer who implies that by limiting disclosure to a corporate website, a company can avoid sharing its information with third parties thereby mitigating the risk of leaks.  What this lawyer is recommending is nothing less than communications agoraphobia!

PR Newswire has been in business for over 55 years handling market-moving information well in advance of such information becoming public.  We have invested millions of dollars in security and training and background checks to ensure that leaks do not happen.  Simply stated, leaks do not happen. Basing an argument on the most remote “what if” is specious at best; irresponsible at worst.

Thankfully, the majority of corporate lawyers I’ve spoken with contend that a company that limits disclosure or that engages in selective disclosure is making the lives of its shareholders and journalists who follow the company more difficult - and may be creating the exact uneven disclosure situation that Reg FD was designed to prevent.

Using a corporation's website should be a key part of a company's disclosure methodology as long as it is part of an integrated disclosure strategy that employs all push and pull elements available to a company.  Anything less is just an attempt to take a shortcut at the expense of one’s investors, stakeholders and the public at large.  It is wrong.  Plain wrong.

The good news, however, is we are seeing more and more respected thought leaders, such as Andrew Ross Sorkin, call out these inequities and praise the true value of full and fair disclosure.

Authored by Scott Mozarsky, chief commercial officer, PR Newswire.

For more ideas on engaging investor audiences online, read PR Newswire's new paper, IR Rising, on how IROs are leveraging online content to build audience for key messages.

Take a Pause, Reflect, Remember – The Spirit of Disclosure

With October marking the 10th anniversary of RegFD, now is an appropriate time for everybody in the industry – communicators, IROs, CEOs, institutional investors, retail traders – to take a step back and consider the true value of this landmark legislation.

In a nutshell, RegFD is designed to ensure that all individuals, companies and investors, everywhere, no matter size of fund, geographic location or industry status have access to the same information at the same time and with the same degree of opportunity.  To borrow a phrase from the military, RegFD is meant to guarantee that “no one is left behind.”

It is a simple, direct, egalitarian concept that should be applauded at every turn.

Yet recently, in a select few but visible instances, the foundation upon which RegFD is built is coming under threat.  Under the auspices of “SEC interpretive guidance” and the notion that certain corporate websites may attract enough traffic to be perceived as a common meeting point, the best intentions of “full-and-fair disclosure” are being brushed aside in favor of the limited engagement and single-pronged disclosure associated with advisory releases and/or website only disclosure.

Plainly and simply, this practice contradicts the intent of Reg FD.  It limits engagement and creates an uneven playing field among investors. It makes life more difficult for the large majority of investors and for the media disrupting their workflow.  In most instances, it limits or delays pick up and opens the door for companies to engage in selective disclosure. While it very well may allow a company to comply with its legal obligations, it is not the right option for anybody who has any involvement with a publicly traded company on any level.

Sure, you may accuse PR Newswire of being biased because our business will be impacted if a large number of companies move towards web only disclosure.  And yes, part of our business is built on providing a proven, efficient system for disclosing material information to the widest possible audience.  That said, this part of our business accounts for less than 10% of our overall global revenues, and we have significant revenues relating to hosting and managing investor relations websites that benefits from web disclosure.  This issue is a lot bigger than PR Newswire or any of its competitive set.  An integrated approach to disclosure is the only way that a company can accomplish maximum engagement with its constituents and create a level playing field.  This can only be achieved through the use of push and pull tactics including a strong corporate website as well as press releases and other tools.

If you take a moment to reflect on RegFD and the spirit of disclosure, it becomes quickly apparent that the “solutions” being proposed today are not in the public’s best interests.

RegFD is about enhancing access.  Not limiting it.

RegFD is about ubiquity.  Not selectivity.

The Spirit of Disclosure is about being open and engaging.   Not restrictive.

The Spirit of Disclosure is about understanding the needs of the “man on the street.” Not just the “man in the suite.”

So, to the vast majority of investors, media, corporate communications professionals, attorneys and public executives who still recognize the immense value that full-and-fair disclosure provides, I ask you to celebrate ten years of improved disclosure due to RegFD and join me in ensuring that it remains as vital tomorrow as it is today.

Authored by Scott Mozarsky, chief commercial officer, PR Newswire