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Simple English definitions for legal terms
Regulation Fair Disclosure
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A quick definition of Regulation Fair Disclosure:
Regulation Fair Disclosure: A rule created by the SEC in 2000 that requires companies to share important information with all investors at the same time. This is to make sure that no one gets an unfair advantage by knowing something before others do. The information could be about earnings, mergers, new products, or anything else that could affect someone's decision to invest in a company. It's also called Regulation FD or Reg. FD.
A more thorough explanation:
Regulation Fair Disclosure (Reg FD) is a rule created by the Securities and Exchange Commission (SEC) in October 2000. It requires companies to disclose important information to all investors at the same time. This is to prevent some investors from getting information before others, which could give them an unfair advantage.
Examples of information that companies must disclose under Reg FD include:
- Earnings reports
- Mergers and acquisitions
- Product discoveries
- Changes in auditors
For instance, if a company discovers a new product that could significantly impact its stock price, it must disclose this information to all investors at the same time. It cannot give this information to a select group of investors before making it public.
Reg FD helps ensure that all investors have access to the same information at the same time, which promotes fairness and transparency in the stock market.