Compliance June 12, 2001

SEC Offers Reg FD Suggestions

December 6, 2001 (PLANSPONSOR.com) - The US Securities and Exchange Commission (SEC) issued a report that examines the impact of Regulation FD on the market, and recommends ways to improve the regulation.

Reported by

editors@plansponsor.com

Regulation FD, or the fair disclosure rule, which was introduced in October 2000, requires public companies to disclose all material information to the general public at the same time as analysts and other selected parties.

Debate

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Proponents of the rule argued for its implementation, saying that it would provide the ordinary investor with the same access to corporate information as financial analysts.

But opponents, including then-SEC Commissioner Laura Unger – the only member of the SEC who voted against the rule’s introduction – countered that the rule would lead corporations to become more guarded about the information they released.

Suggested Fixes

The report, Regulation FD Revisited , makes the following recommendations based on a SEC Roundtable and industry surveys. The SEC should:

tell companies more definitively what information has to be made public under Regulation FD by providing additional guidance on materiality,
give companies an incentive to provide more information by allowing greater use of technology to satisfy Regulation FD’s public information dissemination requirements, and
examine post-Regulation FD market information and filings to better determine the regulation’s impact on the depth and quality of company information in the marketplace

The report includes a transcript of the SEC’s roundtable discussion. Participants included SEC Commissioner Isaac Hunt, issuers, analysts, investors and information disseminators.

– Camilla Klein editors@plansponsor.com