Finance: What is Regulation Full Disclosure?

What is Regulation Full Disclosure? Publicly traded companies are required by SEC rules to release full disclosure of all info related to material events of the company within legal limits and federal statutes. For example, in order to be compliant with SEC rules, Northrop Grumman could announce a new deal to supply fighter jets for the USAF and the dollar amount of the deal, as well as for how many units over what period of time. However, national security rules would prevent the need to disclose the kind of weaponry or tactical stealth capabilities that the aircraft may include.

College and CareerPersonal Finance
CoursesFinance Concepts
FinanceFinance Definitions
Financial Responsibility
Personal Finance
Finance and EconomicsTerms and Concepts
LanguageEnglish Language
Life SkillsFinance Definitions
Personal Finance
SubjectsFinance and Economics
Terms and ConceptsAccounting
Board of Directors
Company Valuation
IPO
Investing
Marketing
Metrics
Regulations
Stocks

Transcript

00:26

essentially unavailable to the average investor was a large part of the

00:30

practice of quote doing research unquote for all too many of the professional by

00:36

side investment firms of the era. the regulator's finally noticed and began to

00:42

crack down with only modest success for a while when finally reg FD was enacted

00:47

via the SEC in 2000. well that regulation massively prohibited the type of

00:53

discussions that could legally happen among analysts and company insiders. in

00:59

fact disclosure of much more than much more than the company name mailing

01:03

address and the product they sold was prohibited unless it was done in a

01:07

broadly available and well-publicized public forum that John Q public could [woman gives presentation]

01:13

participate in. the goal here was to take away free money or profits or gains from

01:18

insiders leaking information you know so that investors could make bets with way

01:25

more information on whether or not the roulette wheel of the company's

01:29

quarterly performance in earnings was going to in fact land on red twenty

01:34

three. so yeah that's what reg FD is about. trust us we've fully disclosed

01:38

everything we know about it and we're going modern here. modern era people come

01:43

on get with it. [man folds arms inside casino]