SEC Releases Regulation Fair Disclosure Study

As promised, the Securities and Exchange Commission has revisited the issues that concern publicly held companies regarding Regulation Fair Disclosure, the ruling that requires publicly held companies to provide information that could influence the purchase of shares simultaneously to every potential investor.

Earlier this year, during confirmation hearings, SEC Chairman Harvey Pitt expressed his support of Reg FD, but stated his intention to examine complaints about the regulation should he be confirmed as SEC chairman. "The underlying concept of Regulation FD is really unassailable, which is that no one should have an unfair advantage in the marketplace," Mr. Pitt said.

Yesterday, the SEC issued "Special Study: Regulation Fair Disclosure Revisited," which elaborates on the SEC's responsibility to provide guidance on issues of materiality, provides detailed explanations for the use of technology in disseminating information, and which includes recommendations that the SEC closely examine the post-FD market information and filings to better determine the regulation's impact on the depth and quality of information in the marketplace.

The report was filed by SEC Commissioner Laura S. Unger, who said, "At the meeting adopting Regulation FD, the Commissioners promised to monitor the regulation's impact on information flow. I am gratified to make good on that promise today by issuing this report. Rather than revisit the merits of Regulation FD, the report studies the SEC Roundtable transcript and public surveys and makes constructive suggestions to the Commission about how to refine the regulation to increase marketplace information."