Material information is information a reasonable investor would consider important in making an investment decision. Regulation FD (Reg FD) is a U.S. SEC rule that requires that when material nonpublic information (MNPI) is disclosed to one person or a small group, the issuer must make that information public to all investors at the same time.
Reg FD applies to both oral and written disclosures by company officers or others who speak on behalf of the company. If MNPI is disclosed to a select audience, the company must promptly disseminate a broad public disclosure via a widely accessible channel, such as a press release, a regulatory filing (for example, Form 8-K), or the company’s website. If the information reaches the market through a public channel, there may be no further action required. The rule covers inadvertent disclosures as well, requiring prompt public disclosure to maintain compliance.
Common channels include earnings calls, investor presentations, press releases, and public filings. The intent is to lessen information advantages by making material information available to all market participants simultaneously. Accuracy and timing are important factors, and the company’s communications team typically coordinates how and when to issue a broad disclosure to satisfy Reg FD.
Reg FD is intended to reduce information asymmetry between insiders and the broader investing public and applies across traditional and digital channels, including social media when the update reaches a broad audience. Violations can lead to SEC enforcement and reputational risk for the company.
If a company's executive tells a single analyst about upcoming earnings, Reg FD would require prompt public disclosure to all investors.
Selective disclosure · Material information · Material nonpublic information (MNPI) · Public disclosure · Securities and Exchange Commission (SEC) · Press release · Earnings call