Trading Platforms need more SMS…

Some time ago, I sat in a meeting with two individuals, an investor and an attorney. The investor had taken a rather large position in a publicly traded company and was lamenting the SEC reporting requirements. It wasn’t the fact that reporting was required, but rather that the systems supporting notification of reporting requirements were rather weak and inadequate. Example, if a passive investor acquires a position of 5% or more of the shares outstanding, the investor becomes obligated to file a 13G report. He/she can continue to acquire shares without further notifying the SEC until the 20% of shares mark. However, if the investor sells enough shares to drop his/her ownership position by 1% then he again needs to notify the SEC. But here’s the kicker, he has 10 days within the event in which to file with the SEC – otherwise penalties come into play.

This sounds simple enough but trading platforms don’t necessarily do percent ownership calculations and therefore do not notify the investor – and I would argue that notification by email is not necessarily too slow but is often widely ignored. In fact, I would argue that 98% of all emails will not be read or barely scanned at all. What’s the solution?

The trading partners obviously can do the calculation and they should automatically send a text message alert to the investor. It’s simple, fast and it will be read. Text messages today are opened and read at a very high rate: 95% plus are read within 90 seconds or less. #innovation #digitalmarketing #automation