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Communications In SEC

In this article, you will find information regarding what type of communications in SEC is carried out to perform it activities and functions. Basically the SEC Communications has been broadly categorized in two main categories. The one is called as the Comment Letters and the other is known as No-Actions Letters category.

The information regarding these two types of Communications in Securities and Exchange Commission is given below. Let us take a brief look at the same.

Comment Letters: The comment letters is one of the main forms of the communications in SEC. These are the letters which are composed by the SEC to a public business concern or a company in which some issues are addressed and comments or feedback is sought. Here is an example- In the month of October, 2001, the Securities and Exchange Commission the SEC composed a comment letter to CA, Inc. in which fifteen items were covered. The most of the items were regarding CA's accounting, including five about revenue recognition. The letter was addresses to the chief financial officer of CA, pleaded guilty to fraud at CA in 2004. This led to an announcement by SEC in June 2004, in which it was started that SEC would publicly publish all the comment letters. It will provide investors access to the information present in those letters and idea about the type of communications taking place in Securities and Exchange Commission. And it will foresee publishing the SEC communications letters would help in elaborating the comment process when it would reach the wider audience.

No-Action Letters: The second type of communication in SEC comprises of no-action letters. These are the letters which are written by the staff of Securities and Exchange Commission suggesting that the staff will not make any recommendations to the Commission that the SEC undertake enforcement action against a person or company if that entity engages in a particular action. These letters are composed and directed to the SEC as revert regarding the requests made when the legal status of an activity is not defined or is unclear. This kind of communications in SEC is made public as it enhances the body of knowledge on what exactly is and is not allowed. These no-action letters represent the staff's readings of the securities laws and, while compelling, not necessarily binding on the courts.