Content area
Full text
I want to tell you how excited I am about the hemisphere-wide investor education campaign that the Council of Securities Regulators of the Americas (COSRA) will launch March 1998. Each COSRA member will run programs in its own country as part of the campaign. Initiatives will include town meetings and radio and TV announcements that raise awareness of important issues to consider when investing. I understand that "hot lines" also will be established for investor complaints.
As one who has led some 20 town meetings for individual investors across the U.S. over the last several years, I heartily endorse this project. The benefits of investor education are many. Not only do educated investors protect themselves better, but they also are willing to invest their money to provide capital to new and expanding companies, thereby allowing businesses and jobs to grow, as well as contributing to regional economic stability. Informed investors are an important ingredient of liquid, stable capital markets. I wholeheartedly support this important COSRA initiative.
Let me now move on to the main subject I want to discuss with you: the need for high quality accounting standards. While this may seem miles removed from investor education, it really isn't. Educated investors need relevant, useful information to make their investment decisions-and that is what high quality accounting standards deliver.
The SEC is concerned with accounting standards because of our mandate to protect investors. U.S. securities laws, as well as the SEC's own rules and regulations, all spring directly from this basic concept. We pursue this mandate not through merit regulation-allowing only "healthy" companies to trade their securities-but by market regulation.
Ever since the SEC was established in 1934, our approach has been to require companies that wanted to list or trade their securities to comply with initial and continuing disclosure obligations. The goals of this approach are to prevent misleading or incomplete financial reporting and to facilitate informed decisions by investors.
Robust financial reporting is essential to full disclosure-that's why the Commission has the authority to set accounting standards. Practically since its inception, however, the SEC has looked to the accounting profession to play a leading role, while the SEC staff monitors and oversees these standard-setting activities. This partnership with the private sector provides a...