Regulation FD, also known as Fair Disclosure, is a rule established by the U.S. Securities and Exchange Commission (SEC) to promote fair and transparent public disclosure of important corporate information by publicly-traded companies. The objective of Regulation FD is to ensure that all investors, both individual and institutional, have equal access to material information in a timely manner.
Under Regulation FD, when a company discloses material non-public information to certain individuals or entities, it must simultaneously disclose the same information to the public. This ensures that the public is not left at a disadvantage due to selective disclosure of information to specific parties, such as analysts or institutional investors, thereby creating a level playing field for all investors.
The regulation prohibits companies from intentionally providing material information to certain individuals or entities before disclosing it to the public. It also encompasses oral communications, emphasizing the importance of prompt public disclosure for any material non-public information shared in meetings or conference calls.
Companies must utilize reasonably designed methods to facilitate public dissemination of information, such as press releases, Form 8-K filings, or other widely accessible means of communication. However, Regulation FD does not require companies to disclose information that is not material or already in the public domain.
Violation of Regulation FD can result in enforcement actions and penalties by the SEC, including fines or other sanctions against the company or individuals responsible for non-compliance. Overall, Regulation FD aims to promote transparency, prevent insider trading, and uphold the principles of fairness in public disclosures within the U.S. securities market.
