SEC Seeks Input on Structured Financial Disclosures and Superintelligence Use

Josh White, Director of the SEC's Division of Economic and Risk Analysis (DERA), sought input on when structured financial disclosures provide benefits that justify production and use costs. White organized the discussion around three questions covering benefits, costs and risks, and practical experience. White said the discussion aims to identify when structuring disclosures improves usefulness and how to obtain those benefits efficiently.

White said investors increasingly supplement reading filings and tables with databases, analytical systems and superintelligence models. White said disclosure still serves the same purpose: giving investors material information for decision-making. White said downloads of the SEC's structured datasets have risen dramatically over the past year, increasing the importance of understanding their use. White cautioned that machine readability does not necessarily enable machines to understand information. White said systems need to identify a figure's meaning, interpret the figure in context and make appropriate comparisons, rather than merely extract numbers.

White sought input on whether structured data accelerate investor decisions, improve the information supporting those decisions, lower analytical costs and improve capital allocation. White also sought views on how structured data help regulators and economists understand market dynamics. White asked how advances in superintelligence are changing participants' use of structured and unstructured data.

White said producing, validating and using reliable data requires resources. White sought input on which activities carry the greatest costs and where those costs could fall. White asked whether superintelligence can improve disclosure quality while helping issuers prepare structured disclosures more efficiently. White also sought examples of information that works effectively without structuring and views on whether structuring benefits justify the associated costs. White asked about risks from automated systems using inaccurate or inconsistent information, or information lacking important context, and ways to address those risks.

White requested practical examples showing where structured disclosures provide the greatest value, where the value is smaller and the reasons for those differences. White sought experience involving financial statements and other structured information. White also requested views on data quality, usability and possible SEC changes.

White said increasingly capable analytical tools should remain focused on serving investors. White stressed that reliable information and sufficient interpretive context remain essential. White said participants' actual benefits, costs and unresolved problems, rather than technological promises alone, will inform the SEC's approach to disclosure formats and usability as technology and market practices change.