Risk & Compliance

Material Girl: SEC’s Unger Issues Report on Reg FD

Says commission needs to be clearer about what constitutes materiality.
Stephen TaubDecember 7, 2001

SEC commissioner Laura Unger issued a detailed report examining the impact of Regulation Fair Disclosure on the marketplace.

The commission adopted Reg FD in October 2000 to end the selective disclosure by issuers to analysts of material company information.

Regulation Fair Disclosure Revisited,” which reviews the regulation’s first year, makes certain findings and recommendations based on an April SEC roundtable and industry surveys. The report makes three key recommendations:

  • First, the report recommends that the SEC should be more definitive about exactly what information companies have to make public under Regulation FD. The report says the commission can accomplish this by providing corporate filers with additional guidance on what constitutes “materiality.”
  • Second, the report recommends that the commission should give incentives to companies to provide more information by allowing greater use of technology to satisfy Regulation FD’s requirements for the public dissemination of information.
  • Third, the report recommends that the commission should closely 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.

“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,” said Unger in a statement.

The report also includes a transcript of the SEC’s roundtable discussion.