Fair Disclosure

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Regulation FD (fair disclosure)

U.S. S.E.C. regulation whose purpose is to ensure that select groups of investors are not privy to firm-specific information before other investors. Executives are not allowed to reveal nonpublic information during their communications with analysts and select shareholders. If information is inadvertently released, they must take steps to broaden the dissemination of the information within 24 hours of discovering the disclosure.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Fair Disclosure

An SEC regulation requiring that all publicly-traded companies in the United States disclose relevant, or "material," information to all shareholders at the same time. Adopted in 2000, this was a response to a common practice in the 1990s, in which large companies disclosed financial information on conference calls to certain analysts while excluding the public and even all shareholders. The regulation mandates that intentional disclosures be made publicly and that unintentional disclosures be made public within twenty-four hours. Controversial when introduced, it has increased access to information on larger firms, but some analysts suggest that it has decreased the information available and therefore increased stock volatility for smaller firms.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
Bengzon then went to the SEC to question the legality of the acquisitions based on the Securities Regulation Code (SRC), which exists to protect investors by ensuring full and fair disclosures of share transactions and eliminating fraudulent and manipulative practices.
"Investors are entitled to fair disclosures about the risks associated with their investments," Michele Wein Layne, director of SEC's regional office in Los Angeles, said in a statement.
"Investors are entitled to fair disclosures about the risks associated with their investments," said Michele Wein Layne, director of SEC's Los Angeles Regional Office, in a statement.
Under the Advisers Act, investment advisers have a fiduciary duty to act solely in the best interests of the client and to make full and fair disclosures of all material facts, including conflicts-related disclosures.
Sellers can protect themselves against warranty claims by making fair disclosures as to matters that would otherwise be breaches of the warranties.This is normally done in a disclosure letter written from the seller to the buyer at the time of the sale, which essentially sets out a warts-and-all view of the state of the business by reference to the warranties.
Will the new SEC regulation on fair disclosure change the way companies announce material information to the marketplace?

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