The Securities and Exchange Commission released (on Black Friday of all days) a document requesting public comment on whether the SEC should develop mechanisms to facilitate greater access by investors and the public to corporate disclosures concerning that corporation’s activities in or with countries designated as State Sponsors of Terrorism. This request for comments is related to the ill-fated and short-lived web listing that the SEC’s Office of Global Security put up last July, and which we discussed here and here. That list purported to help identify companies that had been doing business in sanctioned countries such as Iran, Cuba, Sudan, North Korea and Syria.

The SEC document maintains an agnostic tenor on whether it will reinstitute the Office of Global Security’s list. Instead it asks for comment as to whether the public needs an enhanced tool for this purpose other than the existing mechanisms to search corporate filings with the SEC. The release further notes that the tool might not be useful without constant updating, a task that it states might unduly strain the SEC’s staff and resources. Finally, the SEC document suggests that the disclosure issue might best be handled by having corporate filers include searchable tags with their filings disclosing activities in sanctioned states.

One part of the SEC’s discussion of the Office of Global Security’s list is intriguing. The SEC states that the list was not simply a product of keyword searches but that these searches were further refined by staff analysis of the significance of the activity revealed by the search:

[The list] was not based on a simple keyword search of the Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system. The web tool was the result of a staff review of company disclosure including any reference to a State Sponsor of Terrorism. This disclosure review allowed the web tool to exclude disclosure unrelated to a company’s activities in or with any of these countries (e.g., generic references to a country; references to a State Sponsor of Terrorism in the context of an executive officer’s or director’s experience and educational background; or generic descriptions of risk associated with the possibility of war). It also permitted the web tool to exclude companies whose disclosures stated that they did not conduct business in or with State Sponsors of Terrorism.

But these filters were apparently narrowly applied. As we noted in our initial post on the SEC list, Cadbury Schweppes appeared on the list because it disclosed that it had divested its operations in Syria. Obviously, this meant that the the last filter was applied to exclude only companies that never conducted business in a sanctioned state and not those that at some prior time had done business with a sanctioned state.