Primer on Reg FD

The whys and wherefores on disclosure

The Securities and Exchange Commission's Regulation FD, to take effect today, is designed to even the playing field between institutional and retail investors by prohibiting selective disclosure. The document lays out the regulation's purpose as well as the SEC's answer to critics who believe it will have a chilling effect on disclosure.

The core of the regulation

According to the agency, "when an issuer, or person acting on its behalf, discloses material nonpublic information to certain enumerated persons (in general, securities market professionals and holders of the issuer's securities who may well trade on the basis of the information), it must make public disclosure of that information."