On August 15, 2000, the United States Securities and Exchange Commission (SEC) adopted Regulation Fair Disclosure, often referred to as Regulation FD. The rulemaking was controversial, and the vote of the Commissioners to approve Regulation FD was 3 to 1 in favor. The SEC’s Chairman at the time, Arthur Levitt, believed that Regulation FD was necessary to “level the playing field” for investors, by prohibiting the selective disclosure of material non-public information to market professionals. On the other side of the debate, some feared that Regulation FD would have a chilling effect on the communications between public companies and the market, while others worried that Regulation FD would lead to information overload, where public companies would be obligated to frequently disclose too many material developments.
Over the past twenty years, Regulation FD has significantly shaped the framework for public company communications. The SEC has enforced Regulation FD judiciously, seeking action in the most egregious cases to send a clear message to public companies about the conduct that is expected in accordance with the rules. Regulation FD has also adapted with the changing times, as the Commission has provided guidance on the dissemination of material nonpublic information through websites and social media channels. Today, Regulation FD stands as a key component of the regulation of corporate disclosure.
The SEC Historical Society has prepared an extensive review on the 20th Anniversary of Regulation Fair Disclosure. The review includes an audio program that provides A Historical Perspective on the Development, Implementation and Enforcement of Regulation FD on its twentieth anniversary.
