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Simple English definitions for legal terms
Reg. FD
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A quick definition of Reg. FD:
REG. FD: REGULATION FAIR DISCLOSURE is a rule made by the SEC in October 2000. It 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 and acquisitions, product discoveries, changes in auditors, or anything else that could affect an investor's decision. This rule is often called Regulation FD or Reg. FD.
A more thorough explanation:
Definition: REG. FD stands for Regulation Fair Disclosure, which is a rule established by the Securities and Exchange Commission (SEC) in October 2000. This rule requires companies to disclose important information to all investors at the same time.
The purpose of REG. FD is to prevent some investors from receiving information before others, which could give them an unfair advantage in making investment decisions. This information could include things like earnings reports, mergers and acquisitions, product discoveries, changes in auditors, and any other information that could impact a company's stock price.
Example: Let's say that a company is about to release its quarterly earnings report. Before REG. FD, the company might have shared this information with a select group of investors, such as analysts or large shareholders, before releasing it to the public. This could give those investors an advantage in buying or selling the company's stock based on the information they received.
However, with REG. FD in place, the company must release this information to all investors at the same time, through channels like press releases or public conference calls. This ensures that everyone has access to the same information at the same time, creating a more level playing field for investors.