Reg FD update amid focus on guidance

Aug 21, 2009

Regulator clarifies existing rules in two areas

The SEC has published an update of its interpretations on how companies should comply with Regulation FD.

Lawyers view the move as a reminder to issuers of their disclosure obligations as they come under pressure from investors and analysts over the accuracy of their guidance.

‘There is not the same visibility as there was a few years ago when the economy was more robust,’ comments Michael Littenberg, partner at law firm Schulte Roth & Zabel.
‘What the SEC came out with was fairly timely. It is a reminder to companies grappling with a lot of guidance issues under Regulation FD.’

Littenberg says the update doesn’t cover a lot of new ground, but does clarify two areas for issuers. ‘It says a statement by a company that it has not changed or is still comfortable with prior guidance is the same as providing direct confirmation of that guidance. This is not new law but a modest clarification.’

‘Another clarification in the Compliance and Disclosure Interpretations covers press involvement in non-public meetings. It says the mere presence of press does not establish public disclosure under Regulation FD. Again, this is not really a change in the law, but a clarification.’

Since its introduction of Regulation FD in 2000, the SEC has not carried out many enforcement actions, although there have been many investigations including some that are ongoing. 

The full update is available to read here.

By Tim Human