(August 11 – 11:15 ET) – The Securities and Exchange Commission’s decision to end selective disclosure is receiving mixed reviews from the U.S. securities industry.
The industry trade association, the Securities Industry Association, argues that “investors will soon find that they are receiving less, rather than more, relevant financial information from public companies”, as a result of the move.
The SIA says the new policy will likely restrict the flow of useful information to investors and severely limit transparency. “Regulation FD is well-intentioned, but it will actually hurt, rather than help, the investing public,” said Stuart Kaswell, SIA senior vice president and general counsel.
“Although we appreciate the SEC’s recent efforts to address some of the industry’s concerns by modifying sections of the regulation and allowing for exemptions, we still find Regulation FD to be unacceptable. The changes do not address our fundamental concern — analysts should be allowed to ferret out information on behalf of investors,” Kaswell added.
“The fact that news organizations sought and received special exemptions only serves to support our argument,” Kaswell said. “They argued that they need the same access that we want. But our industry has a fiduciary responsible in managing clients’ money — they don’t.”
“Regulation FD will do the exact opposite of what it’s intended to do,” Kaswell continued. “It’s bad for the markets, and, hence, it’s bad for investors.”
On the other side of the Street, the North American Securities Administrators Association, representing state regulators, Canada’s provincial regulators, along with D.C. and Puerto Rico, came out strongly in favour of the SEC’s split decision.
NASAA president, Brad Skolnik, says, “Regulation FD is another important step in the democratization of Wall Street. In the age of the Internet and 24-hour financial news, there?s no reason for an uneven information playing field on Wall Street. Why shouldn’t investors on Main Street have access to the same information as the pros on Wall Street? Information has empowered our new nation of shareholders, and we need more of it. Chairman Levitt and the SEC understand that.”
-IE Staff