Regulation FD

Regulation Fair Disclosure, also commonly referred to as Regulation FD or Reg FD, is a regulation that was promulgated by the U.S. Securities and Exchange Commission (SEC) in August 2000. The rule mandates that all publicly traded companies must disclose material information to all investors at the same time.

The regulation sought to stamp out selective disclosure, in which some investors (often large institutional investors) received market moving information before others (often smaller, individual investors).

Regulation FD fundamentally changed how companies communicate with investors by bringing more transparency and more frequent and timely communications, perhaps more than any other regulation in the history of the SEC.

On April 2, 2013, the Securities and Exchange Commission said companies can use social media to disseminate information if certain requirements are met. As with company websites, investors’ access to the chosen social media platform must not be restricted and investors must be notified about which social media will be used to disseminate information.

Most corporate announcements are issued via press releases or conference calls and then summarized on websites.

Before the 1990s, most individual investors followed the progress of their stock holdings by receiving phone calls from their , by reading annual or quarterly reports mailed to them by the company, by reading news in newspapers or financial publications, or by calling the company with questions. Most investors relied primarily upon , such as Merrill Lynch, for trading advice.

During the 1990s, Internet usage became widespread and online discount brokers such as Charles Schwab, E-Trade and Ameritrade allowed individual investors to trade stocks online at the push of a button. At the same time, these investors began using the Internet to research stocks and make timely, more informed trading decisions. The Internet placed a plethora of rich research information into the hands of investors, who became more empowered than ever to make their own informed investing decisions. As these investors learned the joys of real-time stock quotes and near-real-time access to press releases, they began to demand even more access.

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