RegFD Handbook

TheCorporateCounsel.
net’s
Regulation FD Handbook
Editors:
Liz Dunshee
Emily Sacks-Wilner
May 2022
© 2022-2023 EP Executive Press, Inc. / 800.737.1271 / info@ccrcorp.com

Chapter 4
Regulation FD
Editors:
Liz Dunshee
Emily Sacks-Wilner
Regulation FD 4-1
Table of Contents
I. SEC Rules and Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-9
II. SEC Staff Guidance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-13

a. Compliance and Disclosure Interpretations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-13
1. Issuer May Selectively Confirm Forecast Under Certain Circumstances . . . 4-13
2. Regulation FD Does Not Itself Create Duty to Update . . . . . . . . . . . . . . . . . 4-14
3. Issuer May Review and Comment on Analyst’s Model Privately
Under Certain Circumstances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-14
4. Selective Disclosure to Analysts Who Agree to
Maintain Confidentiality is Permitted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-14
5. Confidentiality Agreement Exclusion Does Not Require
Agreement to Abstain from Trading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-14
6. Agreement to Not Violate Securities Laws is Not Sufficient
for Confidentiality Agreement Exclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-15
7. Regulation FD Not Applicable to Road Show Disclosures in
Connection with Registered Public Offering . . . . . . . . . . . . . . . . . . . . . . . . . 4-15
8. Regulation FD Applies to Road Show Disclosures
in Connection with Private Placement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-15
9. Regulation FD Not Applicable to Disclosures to Employees . . . . . . . . . . . . 4-16
10. Disclosures by Unauthorized Officers Are Not Covered by
Regulation FD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-16
11. Directors’ Communications with Shareholders
Are Permissible but Subject to Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-16
12. How to Effect Proper Notice for Regulation FD-Compliant
Conference Call . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-17
13. May Use Exchange Act Filings to Satisfy Rule’s
Public Disclosure Requirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-17
14. Confirm Acceptance for Filing of Exchange Act Report
Before Making Selective Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-17
15. Unplanned Selective Disclosure May Still be
“Intentional” under Regulation FD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-18
16. Disclosures at Shareholder Meeting Do Not Meet
“Public Disclosure” Requirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-18
17. Presence of Press at Otherwise Non-Public Meeting
Does Not Make the Meeting Public . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-18
18. Look to SEC Guidance to Determine Whether Web Site
Disclosures Satisfy Regulation FD Requirements . . . . . . . . . . . . . . . . . . . . . 4-19
© 2022-2023 EP Executive Press, Inc.

4-2 TheCorporateCounsel.net’s “In-House Essentials Treatise”
b. Interpretive Guidance: Corporate Web Sites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-19

c. Interpretive Guidance: Social Media Guidance . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-26
III. How the Rules Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-26

a. Understanding Reg FD’s Basics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-26
– Designed to Promote Fairness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-26
– Reg FD is a Disclosure Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-27
– Reg FD Changed Disclosure Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-27
– Reg FD Changed Traditional Analyst Roles . . . . . . . . . . . . . . . . . . . . . . . . 4-28
– Types of Companies Subject to Reg FD . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-28
– Foreign Private Issuers Not Subject to Reg FD . . . . . . . . . . . . . . . . . . . . . . 4-29
– Only “Senior Officials” & Enumerated Others Covered . . . . . . . . . . . . . . . 4-29
– Directors Deemed to Act on Behalf of Company . . . . . . . . . . . . . . . . . . . . 4-30
– VC-Appointed Directors May Face Conflicts of Interest . . . . . . . . . . . . . . . 4-30
– Only Disclosures to Enumerated Market Participants Covered by
Reg FD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-30
– Reg FD Expressly Excludes Certain Types of Disclosures . . . . . . . . . . . . . 4-31
– Senior Officer Can’t Avoid Reg FD by Directing Others to Make
Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-31
– Reg FD Policies & Procedures Should Be Adopted and Enforced . . . . . . . 4-31
– Identify Who Is Authorized to Make Disclosures . . . . . . . . . . . . . . . . . . . . 4-32
– Require Unauthorized Employees to Make Referrals
to Authorized Spokespersons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-32
b. “Material” & “Nonpublic” Information under Reg FD . . . . . . . . . . . . . . . . . . . . . 4-32
– Traditional Definitions of Materiality Apply . . . . . . . . . . . . . . . . . . . . . . . . 4-32
– Enumerated Matters Warrant Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-33
– Materiality Not Presumed with Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . 4-34
– Consider SAB No. 99 in Materiality Analysis . . . . . . . . . . . . . . . . . . . . . . . 4-34
– Materiality Determinations Assessed by Regulators in Hindsight . . . . . . . . 4-34
– “Mosaic” Theory Under Reg FD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-35
– Materiality Based on Facts & Circumstances . . . . . . . . . . . . . . . . . . . . . . . . 4-35
– Consider Designating Disclosure Team for Materiality Evaluations . . . . . . 4-36
– Disclosure Team Typically Composed of Legal, IR, Communications,
Finance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-37
– High “Knowing” or “Reckless” Standard Applies to
Materiality Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-37
– Market Reaction May Indicate Materiality . . . . . . . . . . . . . . . . . . . . . . . . . . 4-38

Regulation FD 4-3
– Private Guidance Reaffirmations Okay in Limited Circumstances . . . . . . . 4-38

– “Nonpublic” Information Largely Defined By Reference to Case Law . . . . 4-39
c. Website & Social Media Disclosures As “Public” . . . . . . . . . . . . . . . . . . . . . . . . . 4-40
– SEC’s Analytical Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-40
– Evaluating Whether Website is a “Recognized Channel of
Distribution” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-41
– Evaluating Whether Website “Dissemination” is Adequate . . . . . . . . . . . . . 4-42
– Reasonableness of Waiting Period Is Facts & Circumstances-Specific . . . . 4-42
– Evaluating Whether Social Media Disclosures Are “Public” . . . . . . . . . . . . 4-43
d. Permitted & Prohibited Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-43
– Reg FD Prohibits Selective Disclosure to Market Participants . . . . . . . . . . 4-43
– Certain Types of Selective Disclosures Expressly Excluded . . . . . . . . . . . . 4-44
– “Investment Advisers” Are Covered Recipients of Information . . . . . . . . . . 4-44
– Security Holders Are Covered Recipients of Information . . . . . . . . . . . . . . 4-46
– Qualified Institutional Buyers or Institutional Accredited Investors are
Covered Recipients . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-46
– Venture Capitalists Are Covered Recipients . . . . . . . . . . . . . . . . . . . . . . . . . 4-47
– Communication of Material Nonpublic Information to
Employees Permitted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-47
– Communication of Material Nonpublic Information to
Investment Bankers Permitted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-47
– Ordinary Course Business Communications with Customers,
Suppliers Permitted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-48
– Ordinary Course Communications with Independent Contractors
Permitted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-48
– Responding to Congressional Office Requests Permitted, Consider Steps
to Protect Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-49
– Communications with Certain Proxy Advisors Subject to Reg FD . . . . . . . 4-49
– Private Communications with Analysts About Earnings is High-Risk . . . . . 4-50
– Private Communications with Analysts Still Permitted in
Certain Circumstances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-51
– Practices for Private Communications with Analysts . . . . . . . . . . . . . . . . . . 4-52
– Limited Access Settings Don’t Satisfy Public Disclosure Requirement . . . 4-53
– Guidelines for Presentations in Limited Access Settings . . . . . . . . . . . . . . . 4-53
– Disclosure at Shareholder Meetings Typically Doesn’t Satisfy Reg FD . . . 4-54
– Consider Posting Transcript for Disclosure at Virtual Shareholder
Meeting, Even for Reg FD Compliant Meetings . . . . . . . . . . . . . . . . . . . . . 4-54

– Prepare to React to Private Analyst Communications After the Fact . . . . . . 4-55

– Confidentiality Agreements Don’t Need To Be In Writing . . . . . . . . . . . . . . 4-55
– Confidentiality Agreements Must Be Express . . . . . . . . . . . . . . . . . . . . . . . 4-56
– Confidentiality Agreements Typically Used for “Test-the-Waters”
Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-56
– Confidentiality Agreements Don’t Need to Prohibit Trading . . . . . . . . . . . . 4-56
– Confidentiality Agreement May Be Obtained After Selective
Disclosure Under Certain Circumstances . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-57
– Agreement to Not Violate Federal Securities Laws
Insufficient for Confidentiality Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . 4-57
– Disclosure of Material Nonpublic Information Under Embargo
Permitted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-57
– May Use Embargo Agreements with Analysts
Before Merger Announced . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-58
– Disclosure to Merger Partners Before Transaction Subject to Reg FD . . . . 4-58
– Use of Press Ordinarily Not Sufficient to Comply with Reg FD . . . . . . . . . 4-58
– Selective Disclosure May Violate Reg FD, Rule 10b-5 &
Exchange Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-60
– Early Advisory Communications to Media Outlets—Use Embargo
Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-60
e. Dissemination of Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-61
– Public Disclosure Can Be Made in Various Ways . . . . . . . . . . . . . . . . . . . . 4-61
– Company Responsible for Ensuring “Broad, Non-Exclusionary
Distribution” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-61
– SEC’s Public Disclosure Model Uses Mix of Disclosure Methods . . . . . . . 4-61
– Press Release Typically Satisfies Public Disclosure Requirement . . . . . . . 4-62
– No Particular Disclosure Method Required . . . . . . . . . . . . . . . . . . . . . . . . . 4-62
– Provide Adequate Advance Notice of Upcoming Call or Meeting . . . . . . . . 4-63
– Advance Notice for Conference Call Requires Certain Information . . . . . . 4-64
– Disclosure of Additional Information on Properly Noticed
Call/Webcast Permitted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-64
– Can “File” or “Furnish” Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-65
– May Use ’34 Act Filings Other Than Form 8-K to Publicly Disclose . . . . . 4-65
– Evaluating Use of Corporate Website for Public Disclosure . . . . . . . . . . . . 4-66
– Corporate Website Often Used with Other Methods . . . . . . . . . . . . . . . . . . 4-66
– Increasing Number of Companies Rely on Website on
Stand-Alone Basis—But Still Not Majority . . . . . . . . . . . . . . . . . . . . . . . . . 4-66
– Use of Blog Postings for “Public” Disclosure . . . . . . . . . . . . . . . . . . . . . . . 4-67
– Use of Social Media for “Public” Disclosure . . . . . . . . . . . . . . . . . . . . . . . . 4-68
– NYSE & Nasdaq Require Prompt Disclosure of Material Information . . . . 4-68

Regulation FD 4-5
f. Timing of Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-72

– Timing Depends on Whether Selective Disclosure Was Intentional . . . . . . 4-72
– “Intentional” Disclosure Triggered by Knowing or Reckless Conduct . . . . 4-72
– “Intent” Based on Facts & Circumstances . . . . . . . . . . . . . . . . . . . . . . . . . . 4-73
– Meaning of “Simultaneous” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-73
– Meaning of “Non-Intentional” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-73
– Be Prepared to Make Quick Materiality Evaluations . . . . . . . . . . . . . . . . . . 4-73
– Definition of “Promptly” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-74
– No Duty to Disclose Due to Merely Possessing Information . . . . . . . . . . . . 4-74
– Reg FD Doesn’t Itself Create or Impact Duty to Update . . . . . . . . . . . . . . . 4-75
g. Securities Offerings & Regulation FD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-75
– Reg FD Doesn’t Apply to Most Registered Securities Offerings . . . . . . . . . 4-75
– Reg FD Applies Before & After Registered Underwritten Offerings . . . . . . 4-76
– Reg FD Applies Before & After Registered Non-Underwritten
Offerings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-76
– Reg FD Applies to Unregistered Offerings . . . . . . . . . . . . . . . . . . . . . . . . . . 4-77
– Material Information Disclosed During Private Placement Subject to
Reg FD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-77
– Reg FD Applies to Unregistered Offering Road Shows . . . . . . . . . . . . . . . . 4-77
– Private Placement Investors May Be Unwilling to Enter Confidentiality
Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-78
– Reg FD Public Disclosure Requirement May Impact
Private Placement Exemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-78
– Investment Bankers Covered by Reg FD as Company Agents . . . . . . . . . . . 4-79
– Communications in Connection with Registered M&A Exempt . . . . . . . . . 4-79
– Reg FD Applies to Specified Ongoing Registered Shelf Offerings . . . . . . . 4-79
h. Violations of Regulation FD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-80
– Violating Reg FD Won’t Itself Trigger Private Lawsuit . . . . . . . . . . . . . . . . 4-80
– SEC Deliberately Limited Consequences of Violating Reg FD . . . . . . . . . . 4-80
– Independent Auditors May Be Required to Report Reg FD Violations . . . . 4-81
– Disclosure Violations May Be Actionable on Other Grounds . . . . . . . . . . . 4-81
– Employees May Be Individually Liable for Reg FD Violations . . . . . . . . . . 4-81
– SEC’s Reg FD Enforcement May Take Different Forms . . . . . . . . . . . . . . . 4-82
i. Policies & Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-82
– Adoption & Adherence to Reg FD Policies/Procedures Strongly
Advised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-82
– Reg FD Policy Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-84
– Review Stock Exchange Standards When Drafting Policy . . . . . . . . . . . . . 4-85
– Designate Limited Number of Authorized Spokespersons . . . . . . . . . . . . . . 4-86

– Implement Policies Addressing Director Communications

With Investors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-87
– Presentations to Market Participants Should Be Subject to
Pre-Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-88
– Pre-Approve Presentations Even If Not “Typical” Analyst Meeting . . . . . . 4-88
– Address Communications with Analysts & Review of Analyst Reports . . . 4-88
– Address “Quiet Period” Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-89
– Address Social Media in Reg FD Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-89
– Address “Materiality” in FD Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-90
– Monitor Market Activity & Rumors on Ongoing Basis . . . . . . . . . . . . . . . . 4-90
– Educate All Employees—Not Just Senior Officials . . . . . . . . . . . . . . . . . . . 4-90
– Implement Regular Reg FD Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-91
IV. Common Questions & Our Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-92

a. Understanding the Basics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-92
1. Identify Authorized Spokespersons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-92
2. Require Unauthorized Employees to Refer Inquiries to Spokespersons . . . 4-92
3. Disclosure to Government Not Subject to Reg FD (But Still May
Warrant Public Disclosure) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-93
4. Disclosure to Independent Contractors Permissible . . . . . . . . . . . . . . . . . . . 4-93
5. Form 15 Filer Subject to Regulation FD . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-94
6. Investment Banker Exception Applies Once Banker Engaged . . . . . . . . . . . 4-94
7. Reg FD Applies to Communications with ISS . . . . . . . . . . . . . . . . . . . . . . . 4-94
8. Confidentiality Agreement Can Be Oral . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-95
b. Material & Nonpublic Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-95
1. May Disclose Non-Material Information to Analysts That Completes
Mosaic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-95
2. Private Discussions with Market Participants About Earnings Are
Risky . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-96
3. Correcting Analyst Perceptions After Earnings Release Likely Violates
Reg FD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-96
4. Look to Stock Price Movement as Materiality Indicator . . . . . . . . . . . . . . . 4-97
5. No Duty to Disclose Based on Mere Possession of Material Nonpublic
Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-98
6. Prepare to Make Real-Time Materiality Determinations . . . . . . . . . . . . . . . 4-98
7. Team Composition for Materiality Evaluations . . . . . . . . . . . . . . . . . . . . . . 4-99
8. Evaluating Materiality of Non-Intentional Disclosures . . . . . . . . . . . . . . . 4-100
9. How to Detect & React to Potentially Mistaken Materiality
Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-100
10. Reg FD Impact on Compensation Plan Disclosure . . . . . . . . . . . . . . . . . . . 4-101

Regulation FD 4-7
11. Reg FD Impact on Merger-Related Announcements . . . . . . . . . . . . . . . . . 4-101

12. Material Post-Closing True-Up Information Subject to Reg FD . . . . . . . . 4-101
c. Private Conversations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-102
1. Minimizing Risks of Private Analyst Communications . . . . . . . . . . . . . . . 4-102
2. Okay to Communicate Immaterial Information to Analysts . . . . . . . . . . . . 4-103
3. Policies/Procedures Should Govern Analyst Communications . . . . . . . . . 4-103
4. Document Private Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-104
5. Communications with Merger Partners Subject to Reg FD . . . . . . . . . . . . 4-105
6. Communications with Venture Capitalists Subject to Reg FD . . . . . . . . . . 4-105
7. Confidentiality Agreements Don’t Need to Prohibit Trading . . . . . . . . . . . 4-105
8. Don’t Rely on Third-Party Confidentiality Agreements . . . . . . . . . . . . . . . 4-106
9. Agreement to Not Violate Federal Securities Laws Inadequate . . . . . . . . . 4-106
10. Factors Determining Confidentiality Agreement Duration . . . . . . . . . . . . . 4-107
11. Press Communications Should Be Handled With Caution . . . . . . . . . . . . . 4-107
12. Embargoing Permissible Means to Enable Selective Disclosure . . . . . . . . 4-107
13. Embargo Agreements with Analysts May Be Helpful in Mergers . . . . . . . 4-108
14. Disclosures by Directors Subject to Reg FD . . . . . . . . . . . . . . . . . . . . . . . 4-108
d. Dissemination of Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-109
1. Various Permissible Means of Public Disclosure . . . . . . . . . . . . . . . . . . . . 4-109
2. Form 8-K Itself Is Sufficient Means of Public Disclosure . . . . . . . . . . . . . 4-109
3. Timing for Earnings Release & Earnings Call . . . . . . . . . . . . . . . . . . . . . . 4-110
4. Timing for Quarterly Pre-Announcement . . . . . . . . . . . . . . . . . . . . . . . . . . 4-111
5. Announcing Reg FD-Compliant Investor Meetings . . . . . . . . . . . . . . . . . . 4-111
6. Live/Recorded Webcasts for Investor Days . . . . . . . . . . . . . . . . . . . . . . . . 4-112
7. Publicly Furnish Handouts from Reg-FD Compliant Meetings . . . . . . . . . 4-112
8. Adequate Notice for Reg FD-Compliant Conference Call . . . . . . . . . . . . . 4-113
9. Toll-Free Numbers Not Required for Investor Calls(But
Overwhelmingly Common) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-114
10. Disclosure of Material, Related Information on Earnings Webcast
Permissible . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-114
11. Disclosure of Related Information on Earnings Call Doesn’t Trigger
Additional 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-115
12. Feeding Questions to Analysts/Others to Ask Could Be Problematic . . . . 4-115
13. Form 8-K Sufficient for Earnings Guidance Update (But Press Release
Typically Also Issued) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-116
14. Use of Website for Reg FD Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-116
15. Determining Whether Corporate Website is Recognized Channel of
Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-118
16. Determining Whether Website Information Is Generally Available . . . . . . 4-120
17. Use of Social Media for Public Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . 4-121
18. Reg FD-Compliant Investor Conferences . . . . . . . . . . . . . . . . . . . . . . . . . . 4-121
19. Using Website to Announce Investor Conference . . . . . . . . . . . . . . . . . . . 4-122

20. Presence of Media Ordinarily Inadequate to Achieve Public

Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-122
21. Intentional Disclosures Require Knowing or Reckless Conduct . . . . . . . . 4-122
22. Simultaneous Disclosure Means Public Disclosure Must be
Concurrent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-123
23. Non Reg FD-Compliant Semi-Public & Private Forums . . . . . . . . . . . . . . 4-123
24. Guidelines for Disclosures in Limited Access Settings . . . . . . . . . . . . . . . 4-124
25. Webcasting Annual Shareholder Meetings Not Required,
But May be Considered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-124
26. Disclosure at Shareholder Meetings Isn’t Public Disclosure . . . . . . . . . . . 4-125
27. Virtual Shareholder Meeting Inadvertent Disclosure: Consider Posting
Transcript, Even for Reg FD Compliant Meetings . . . . . . . . . . . . . . . . . . . 4-125
28. Ensure Prominent Disclosure of Virtual Meeting Format Announced
in Proxy Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-125
29. Informing NYSE of Material Information If Happens After
Market Close . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-126
30. Regulation FD Disclosure on Weekend or Holiday When EDGAR
Unavailable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-126
e. Securities Offerings & Regulation FD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-127
1. Communications During Private Placements Subject to Reg FD . . . . . . . . 4-127
2. Private Placement Road Show Communications Subject to Reg FD . . . . . 4-127
3. Planned Private Offering as Material, Non-Public Information . . . . . . . . . 4-128
4. Private Placement Investors May Be Unwilling
to Enter Confidentiality Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-128
5. Public Disclosure Requirement in Unregistered Offerings
May Impact Exemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-128
6. Using Securities Act Rule 135c to Comply With FD . . . . . . . . . . . . . . . . . 4-129
7. Securities Act Rule 135c Likely Designed for Written
Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-130
8. Investment Bankers Acting as Private Placement Agents
Are Company “Agents” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-130
9. Reg FD Doesn’t Apply to Registered M&A Communications . . . . . . . . . . 4-130
V. History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-131
a. 2000—Adoption of Regulation FD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-131
b. 2000 and 2001—Regulation FD Telephone Interpretations . . . . . . . . . . . . . . . 4-132
c. 2001—SEC Commissioner Recommendations . . . . . . . . . . . . . . . . . . . . . . . . 4-132
d. 2008—“Company Web Site” Interpretive Guidance . . . . . . . . . . . . . . . . . . . . 4-132
e. 2009 and 2010—Compliance and Disclosure Interpretations . . . . . . . . . . . . . 4-133
f. 2010—Dodd-Frank Removal of Credit Rating Agencies . . . . . . . . . . . . . . . . . 4-133
g. 2013—Section 21(a) Report on Social Media . . . . . . . . . . . . . . . . . . . . . . . . . 4-134
Appendix A—Regulation FD Compliance Roadmap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-135

Regulation FD 4-9
I. SEC Rules and Regulations
Regulation FD was adopted in 2000 and sets forth the SEC rules governing selective disclosure by
companies of material nonpublic information. The SEC adopted Regulation FD to protect investors
by creating a level playing field for their access to material nonpublic information.
Below is the text of Regulation FD:
Rule 100 General rule regarding selective disclosure.
(a) Whenever an issuer, or any person acting on its behalf, discloses any material
nonpublic information regarding that issuer or its securities to any person described
in paragraph (b)(1) of this section, the issuer shall make public disclosure of that
information as provided in §243.101(e):
(1) Simultaneously, in the case of an intentional disclosure; and
(2) Promptly, in the case of a non-intentional disclosure.
(b) (1) Except as provided in paragraph (b)(2) of this section, paragraph (a) of this
section shall apply to a disclosure made to any person outside the issuer:
(i) Who is a broker or dealer, or a person associated with a broker or dealer, as

those terms are defined in Section 3(a) of the Securities Exchange Act of 1934
(15 U.S.C. 78c(a));
(ii) Who is an investment adviser, as that term is defined in Section 202(a)

(11) of the Investment Advisers Act of 1940 (15 U.S.C. 80b–2(a)(11)); an
institutional investment manager, as that term is defined in Section 13(f)(6) of
the Securities Exchange Act of 1934 (15 U.S.C. 78m(f)(6)), that filed a report
on Form 13F (17 CFR 249.325) with the Commission for the most recent
quarter ended prior to the date of the disclosure; or a person associated with
either of the foregoing. For purposes of this paragraph, a “person associated
with an investment adviser or institutional investment manager” has the
meaning set forth in Section 202(a)(17) of the Investment Advisers Act of 1940
(15 U.S.C. 80b–2(a)(17)), assuming for these purposes that an institutional
investment manager is an investment adviser;
(iii) Who is an investment company, as defined in Section 3 of the Investment

Company Act of 1940 (15 U.S.C. 80a–3), or who would be an investment
company but for Section 3(c)(1) (15 U.S.C. 80a–3(c)(1)) or Section
3(c)(7) (15 U.S.C. 80a–3(c)(7)) thereof, or an affiliated person of either of
the foregoing. For purposes of this paragraph, “affiliated person” means
only those persons described in Section 2(a)(3)(C), (D), (E), and (F) of the
Investment Company Act of 1940 (15 U.S.C. 80a–2(a)(3)(C), (D), (E), and

(F)), assuming for these purposes that a person who would be an investment
company but for Section 3(c)(1) (15 U.S.C. 80a–3(c)(1)) or Section 3(c)(7)
(15 U.S.C. 80a–3(c)(7)) of the Investment Company Act of 1940 is an
investment company; or
(iv) Who is a holder of the issuer’s securities, under circumstances in which KEY
it is reasonably foreseeable that the person will purchase or sell the issuer’s
securities on the basis of the information.
(2) Paragraph (a) of this section shall not apply to a disclosure made:
(i) To a person who owes a duty of trust or confidence to the issuer (such as an
attorney, investment banker, or accountant);
(ii) To a person who expressly agrees to maintain the disclosed information

in confidence;
(iii) In connection with a securities offering registered under the Securities Act,
other than an offering of the type described in any of Rule 415(a)(1)(i) through (vi)
under the Securities Act (§230.415(a)(1)(i) through (vi) of this chapter) (except
an offering of the type described in Rule 415(a)(1)(i) under the Securities Act
(§230.415(a)(1)(i) of this chapter) also involving a registered offering, whether or
not underwritten, for capital formation purposes for the account of the issuer (unless
the issuer’s offering is being registered for the purpose of evading the requirements
of this section)), if the disclosure is by any of the following means:
(A) A registration statement filed under the Securities Act, including a
prospectus contained therein;
(B) A free writing prospectus used after filing of the registration

statement for the offering or a communication falling within the
exception to the definition of prospectus contained in clause (a) of
section 2(a)(10) of the Securities Act;
(C) Any other Section 10(b) prospectus;
(D) A notice permitted by Rule 135 under the Securities Act

(§230.135 of this chapter);
(E) A communication permitted by Rule 134 under the Securities Act

(§230.134 of this chapter); or
(F) An oral communication made in connection with the registered

securities offering after filing of the registration statement for the
offering under the Securities Act.
§ 230.415 Delayed or continuous offering and sale of securities. (a) Securities may be registered for an offering to be made on a continuous or delayed basis in the future, Provided, That: (1) The registration statement
pertains only to: (i) Securities which are to be offered or sold solely by or on behalf of a person or persons other than the registrant, a subsidiary of the registrant or a person of which the registrant is a subsidiary; (ii)
Securities which are to be offered and sold pursuant to a dividend or interest reinvestment plan or an employee benefit plan of the registrant; (iii) Securities which are to be issued upon the exercise of outstanding options,
warrants or rights; (iv) Securities which are to be issued upon conversion of other outstanding securities;
Regulation FD 4-11
Rule 101 Definitions.
This section defines certain terms as used in Regulation FD (§§243.100 –243.103).
(a) Intentional. A selective disclosure of material nonpublic information is “intentional”

when the person making the disclosure either knows, or is reckless in not knowing, that
the information he or she is communicating is both material and nonpublic.
(b) Issuer. An “issuer” subject to this regulation is one that has a class of securities reg-
istered under Section 12 of the Securities Exchange Act of 1934 (15 U.S.C. 78 l ), or
is required to file reports under Section 15(d) of the Securities Exchange Act of 1934
(15 U.S.C. 78o(d)), including any closed-end investment company (as defined in Section
5(a)(2) of the Investment Company Act of 1940) (15 U.S.C. 80a–5(a)(2)), but not includ-
ing any other investment company or any foreign government or foreign private issuer, as
those terms are defined in Rule 405 under the Securities Act (§230.405 of this chapter).
(c) Person acting on behalf of an issuer. “Person acting on behalf of an issuer” means any
senior official of the issuer (or, in the case of a closed-end investment company, a senior
official of the issuer’s investment adviser), or any other officer, employee, or agent of an
issuer who regularly communicates with any person described in §243.100(b)(1)(i), (ii),
or (iii), or with holders of the issuer’s securities. An officer, director, employee, or agent
of an issuer who discloses material nonpublic information in breach of a duty of trust or
confidence to the issuer shall not be considered to be acting on behalf of the issuer.
(d) Promptly. “Promptly” means as soon as reasonably practicable (but in no event after
the later of 24 hours or the commencement of the next day’s trading on the New York
Stock Exchange) after a senior official of the issuer (or, in the case of a closed-end invest-
ment company, a senior official of the issuer’s investment adviser) learns that there has
been a non-intentional disclosure by the issuer or person acting on behalf of the issuer of
information that the senior official knows, or is reckless in not knowing, is both material
and nonpublic.
(e) Public disclosure.
(1) Except as provided in paragraph (e)(2) of this section, an issuer shall make
the “public disclosure” of information required by §243.100(a) by furnishing to
or filing with the Commission a Form 8–K (17 CFR 249.308) disclosing
that information.
(2) An issuer shall be exempt from the requirement to furnish or file a Form
8–K if it instead disseminates the information through another method (or com-
bination of methods) of disclosure that is reasonably designed to provide broad,
non-exclusionary distribution of the information to the public.

(f) Senior official. “Senior official” means any director, executive officer (as defined in
§240.3b–7 of this chapter), investor relations or public relations officer, or other person
with similar functions.
(g) Securities offering. For purposes of §243.100(b)(2)(iv):
(1) Underwritten offerings. A securities offering that is underwritten commenc-

es when the issuer reaches an understanding with the broker-dealer that is to act
as managing underwriter and continues until the later of the end of the period
during which a dealer must deliver a prospectus or the sale of the securities
(unless the offering is sooner terminated);
(2) Non-underwritten offerings. A securities offering that is not underwritten:
(i) If covered by Rule 415(a)(1)(x) (§230.415(a)(1)(x) of this chap-

ter), commences when the issuer makes its first bona fide offer in a
takedown of securities and continues until the later of the end of
the period during which each dealer must deliver a prospectus or
the sale of the securities in that takedown (unless the takedown is
sooner terminated);
(ii) If a business combination as defined in Rule 165(f)(1)

(§230.165(f)(1) of this chapter), commences when the first public
announcement of the transaction is made and continues until the com-
pletion of the vote or the expiration of the tender offer, as applicable
(unless the transaction is sooner terminated);
(iii) If an offering other than those specified in paragraphs (a) and

(b) of this section, commences when the issuer files a registration
statement and continues until the later of the end of the period during
which each dealer must deliver a prospectus or the sale of the securi-
ties (unless the offering is sooner terminated).
Rule 102 No effect on antifraud liability.
No failure to make a public disclosure required solely by §243.100 shall be deemed to be

a violation of Rule 10b–5 (17 CFR 240.10b–5) under the Securities Exchange Act.
Rule 103 No effect on Exchange Act reporting status.
A failure to make a public disclosure required solely by §243.100 shall not affect whether:
(a) For purposes of Forms S–2 (17 CFR 239.12), S–3 (17 CFR 239.13) and S–8 (17
CFR 239.16b) under the Securities Act, an issuer is deemed to have filed all the material

Regulation FD 4-13
required to be filed pursuant to Section 13 or 15(d) of the Securities Exchange Act of

1934 (15 U.S.C. 78m or 78o(d)) or, where applicable, has made those filings in a timely
manner; or
(b) There is adequate current public information about the issuer for purposes of
§230.144(c) of this chapter (Rule 144(c)).
II. SEC Staff Guidance
a. Compliance and Disclosure Interpretations
There are 18 Compliance and Disclosure Interpretations regarding Regulation FD. We have added
the subject headings.
1. Issuer May Selectively Confirm Forecast Under Certain Circumstances
Question 101.01
Question: Can an issuer ever confirm selectively a forecast it has previously made to the public
without triggering the rule’s public reporting requirements?
Answer: Yes. In assessing the materiality of an issuer’s confirmation of its own forecast, the issuer
should consider whether the confirmation conveys any information above and beyond the original
forecast and whether that additional information is itself material. That may depend on, among
other things, the amount of time that has elapsed between the original forecast and the confirmation
(or the amount of time elapsed since the last public confirmation, if applicable). For example, a
confirmation of expected quarterly earnings made near the end of a quarter might convey informa-
tion about how the issuer actually performed. In that respect, the inference a reasonable investor
may draw from such a confirmation may differ significantly from the inference he or she may have
drawn from the original forecast early in the quarter. The materiality of a confirmation also may de-
pend on, among other things, intervening events. For example, if it is clear that the issuer’s forecast
is highly dependent on a particular customer and the customer subsequently announces that it is
ceasing operations, a confirmation by the issuer of a prior forecast may be material.
We note that a statement by an issuer that it has “not changed,” or that it is “still comfortable with,”
a prior forecast is no different than a confirmation of a prior forecast. Moreover, under certain
circumstances, an issuer’s reference to a prior forecast may imply that the issuer is confirming the
forecast. If, when asked about a prior forecast, the issuer does not want to confirm it, the issuer may
simply wish to say “no comment.” If an issuer wishes to refer back to the prior estimate without
implicitly confirming it, the issuer should make clear that the prior estimate was as of the date it
was given and is not being updated as of the time of the subsequent statement. [Aug. 14, 2009]

2. Regulation FD Does Not Itself Create Duty to Update
Question 101.02
Question: Does Regulation FD create a duty to update?
Answer: No. Regulation FD does not change existing law with respect to any duty to update.
[Aug. 14, 2009]
3. Issuer May Review and Comment on Analyst’s Model Privately Under Certain Circumstances
Question 101.03
Question: Can an issuer ever review and comment on an analyst’s model privately without trigger-
ing Regulation FD’s disclosure requirements?
Answer: Yes. It depends on whether, in so doing, the issuer communicates material nonpublic
information. For example, an issuer ordinarily would not be conveying material nonpublic informa-
tion if it corrected historical facts that were a matter of public record. An issuer also would not be
conveying such information if it shared seemingly inconsequential data which, pieced together with
public information by a skilled analyst with knowledge of the issuer and the industry, helps form a
mosaic that reveals material nonpublic information. It would not violate Regulation FD to reveal
this type of data even if, when added to the analyst’s own fund of knowledge, it is used to construct
his or her ultimate judgments about the issuer. An issuer may not, however, use the discussion of an
analyst’s model as a vehicle for selectively communicating—either expressly or in code—material
nonpublic information. [Aug. 14, 2009]
4. Selective Disclosure to Analysts Who Agree to Maintain Confidentiality is Permitted
Question 101.04
Question: May an issuer provide material nonpublic information to analysts as long as the analysts
expressly agree to maintain confidentiality until the information is public?
Answer: Yes. [Aug. 14, 2009]
5. Confidentiality Agreement Exclusion Does Not Require Agreement to Abstain from Trading
Question 101.05
Question: If an issuer gets an agreement to maintain material nonpublic information in confidence,

must it also get the additional statement that the recipient agrees not to trade on the information in
order to rely on the exclusion in Rule 100(b)(2)(ii) of Regulation FD?

Regulation FD 4-15
Answer: No. An express agreement to maintain the information in confidence is sufficient. If a

recipient of material nonpublic information subject to such a confidentiality agreement trades or
advises others to trade, he or she could face insider trading liability. [Aug. 14, 2009]
6. Agreement to Not Violate Securities Laws is Not Sufficient for Confidentiality

Agreement Exclusion
Question 101.06
Question: If an issuer wishes to rely on the confidentiality agreement exclusion of Regulation FD,
is it sufficient to get an acknowledgment that the recipient of the material nonpublic information
will not use the information in violation of the federal securities laws?
Answer: No. The recipient must expressly agree to keep the information confidential.
[Aug. 14, 2009]
7. Regulation FD Not Applicable to Road Show Disclosures in Connection with Registered

Public Offering
Question 101.07
Question: Must road show materials in connection with a registered public offering be disclosed
under Regulation FD?
Answer: Any disclosure made “in connection with” a registered public offering of the type ex-
cluded from Regulation FD is not subject to Regulation FD. That includes road shows in those
offerings. All other road shows are subject to Regulation FD in the absence of another applicable
exclusion from Regulation FD. For example, a disclosure in a road show in an unregistered offer-
ing is subject to Regulation FD. Also, a disclosure in a road show made while the issuer is not in
registration and is not otherwise engaged in a securities offering is subject to Regulation FD. If,
however, those who receive road show information expressly agree to keep the material nonpublic
information confidential, disclosure to them is not subject to Regulation FD. [Aug. 14, 2009]
8. Regulation FD Applies to Road Show Disclosures in Connection with Private Placement
Question 101.08
Question: A publicly traded company has decided to conduct a private placement of shares and
then subsequently register the resale by those shareholders on a Form S-3 registration statement.
The company and its investment bankers conduct mini-road shows over a three-day period during
the private placement. Does the resale registration statement filed after completion of the private
placement affect whether disclosure at the road shows is covered by Regulation FD?
Answer: No. The road shows are made in connection with an offering by the issuer that is not reg-
istered (i.e., the private placement), regardless of whether a registration statement is later filed for
an offering by those who purchased in the private placement. [Aug. 14, 2009]

9. Regulation FD Not Applicable to Disclosures to Employees
Question 101.09
Question: Can an issuer disclose material nonpublic information to its employees (who may also
be shareholders) without making public disclosure of the information?
Answer: Yes. Rule 100(b)(1) states that Regulation FD applies to disclosures made to “any person
outside the issuer.” Regulation FD does not apply to communications of confidential information to
employees of the issuer. An issuer’s officers, directors, and other employees are subject to duties of
trust and confidence and face insider trading liability if they trade or tip. [Aug. 14, 2009]
10. Disclosures by Unauthorized Officers Are Not Covered by Regulation FD
Question 101.10
Question: If an issuer has a policy that limits which senior officials are authorized to speak
to persons enumerated in Rule 100(b)(1)(i)–(b)(1)(iv), will disclosures by senior officials not
authorized to speak under the policy be subject to Regulation FD?
Answer: No. Selective disclosures of material nonpublic information by senior officials not
authorized to speak to enumerated persons are made in breach of a duty of trust or confidence to the
issuer and are not covered by Regulation FD. Such disclosures may, however, trigger liability under
existing insider trading law. [Aug. 14, 2009]
11. Directors’ Communications with Shareholders Are Permissible but Subject to Rule
Question 101.11
Question: Does Regulation FD prohibit directors from speaking privately with a shareholder or
groups of shareholders?
Answer: No. Regulation FD prohibits a company or a person acting on its behalf—such as

directors, executive officers and investor relations personnel—from selectively disclosing
material, non-public information to a shareholder under circumstances in which it is reasonably
foreseeable that the shareholder will purchase or sell the company’s securities on the basis of that
information. If a company’s directors are authorized to speak on behalf of the company and plan on
speaking privately with a shareholder or group of shareholders, then the company should consider
implementing policies and procedures intended to help avoid Regulation FD violations, such as
pre-clearing discussion topics with the shareholder or having company counsel participate in the
meeting. In addition, because Regulation FD does not apply to disclosures made to a person who
expressly agrees to maintain the disclosed information in confidence, a private communication
between an independent director and a shareholder would not present Regulation FD issues if the
shareholder provided such an express agreement. [June 4, 2010]

Regulation FD 4-17
12. How to Effect Proper Notice for Regulation FD-Compliant Conference Call
Question 102.01
Question: If an issuer wants to make public disclosure of material nonpublic information under
Regulation FD by means of a conference call, what information must the issuer provide in the
notice and how far in advance should notice be given?
Answer: An adequate advance notice under Regulation FD must include the date, time, subject
matter and call-in information for the conference call. Issuers also should consider the following
non-exclusive factors in determining what constitutes adequate advance notice of a conference call:
• Timing: Public notice should be provided a reasonable period of time ahead of the conference
call. For example, for a quarterly earnings announcement that the issuer makes on a regular
basis, notice of several days would be reasonable. We recognize, however, that the period of
notice may be shorter when unexpected events occur and the information is critical or time
sensitive.
• Availability: If a transcript or re-play of the conference call will be available after it has
occurred, for instance via the issuer’s website, we encourage issuers to indicate in the notice
how, and for how long, such a record will be available to the public. [Aug. 14, 2009]
AQUI 13. May Use Exchange Act Filings to Satisfy Rule’s Public Disclosure Requirement
Question 102.02
Question: Could an Exchange Act filing other than a Form 8-K, such as a Form 10-Q or proxy
statement, constitute public disclosure?
Answer: Yes. In general, including information in a document publicly filed on EDGAR with
the SEC within the time frames that Regulation FD requires would satisfy the rule. In considering
whether that disclosure is sufficient, however, companies must take care to bring the disclosure
to the attention of readers of the document, must not bury the information, and must not make the
disclosure in a piecemeal fashion throughout the filing. [Aug. 14, 2009]
14. Confirm Acceptance for Filing of Exchange Act Report Before Making Selective Disclosure
Question 102.03
Question: For purposes of Regulation FD, must an issuer wait some period of time after making a
filing or furnishing a report on EDGAR that complies with the Exchange Act before making disclo-
sure of the same information in a non-public meeting?
Answer: Prior to making disclosure of this information in a non-public meeting, the issuer need
only confirm that the filing or furnished report has been accepted for filing on EDGAR and is
publicly available on EDGAR. [Aug. 14, 2009]

15. Unplanned Selective Disclosure May Still be “Intentional” under Regulation FD

Question 102.04
Question: During a nonpublic meeting with analysts, an issuer’s CEO provides material nonpublic
information on a subject she had not planned to cover. Although the CEO had not planned to dis-
close this information when she entered the meeting, after hearing the direction of the discussion,
she decided to provide it, knowing that the information was material and nonpublic. Would this be
considered an intentional disclosure that violated Regulation FD because no simultaneous public
disclosure was made?
Answer: Yes. A disclosure is “intentional” under Rule 101(a) when the person making it either
knows, or is reckless in not knowing, that the information he or she is communicating is both material
and nonpublic. In this example, the CEO knew that the information was material and nonpublic, so
the disclosure was intentional, even though she did not originally plan to make it. [Aug. 14, 2009]
16. Disclosures at Shareholder Meeting Do Not Meet “Public Disclosure” Requirement
Question 102.05
Question: Can an issuer satisfy Regulation FD’s public disclosure requirement by disclosing ma-
terial nonpublic information in a speech at a shareholder meeting open to the public? The meeting
will not be covered by the press, or webcast or broadcast by any electronic means.
Answer: No. Under Rule 101(e), public disclosure of information required to be disclosed by Rule
100(a) can be made either by furnishing or filing with the Commission a Form 8-K disclosing that
information, or by disseminating the information through another method or combination of meth-
ods of disclosure “that is reasonably designed to provide broad, non-exclusionary distribution of the
information to the public.” A meeting that is open to the public but not otherwise webcast or broad-
cast by any electronic means is not a method of disclosure “reasonably designed to provide broad,
non-exclusionary distribution of the information to the public.” [Aug. 14, 2009]
17. Presence of Press at Otherwise Non-Public Meeting Does Not Make the Meeting Public
Question 102.06
Question: Does the mere presence of the press at an otherwise non-public meeting attended by
persons outside the issuer described in paragraph (b)(1) of Rule 100 under Regulation FD render
the meeting public for purposes of Regulation FD?
Answer: No. [Aug. 14, 2009]

Regulation FD 4-19
18. Look to SEC Guidance to Determine Whether Web Site Disclosures Satisfy Regulation
FD Requirements
Question 102.07
Question: What are the circumstances under which information posted on a company web site
(whether by or on behalf of such company) would be considered “public” for purposes of evalu-
ating the (1) applicability of Regulation FD to subsequent private discussions or disclosure of the
posted information and (2) satisfaction of Regulation FD’s “public disclosure” requirement?
Answer: The Commission has provided guidance on both of these questions in its interpretive
release, “Commission Guidance on the Use of Company Web Sites,” Exchange Act Release No.
58288 (Aug. 1, 2008). [Aug. 14, 2009]
b. Interpretive Guidance: Corporate Web Sites
In August 2008, the SEC published an interpretive release to provide guidance on the use of com-
pany websites under the Exchange Act and the antifraud provisions of the federal securities laws
(Rel. No. 34-58288). The guidance addressed, among other things, the circumstances under which
information posted on a company website would be considered “public” for purposes of evaluating
the (1) applicability of Regulation FD to subsequent private discussions or disclosure of the posted
information and (2) satisfaction of Regulation FD’s “public disclosure” requirement.
The text of the portion of the release concerning these issues is below, with the corresponding foot-
notes following the text:
II. Application of Certain Provisions of the Federal Securities Laws to Information

Presented on Company Web Sites
A. Evaluation of “Public” Nature of Information on Company Web Sites
As we note above, there has been a dramatic increase in the use of company web sites
since our 2000 Electronics Release and the adoption of Regulation FD.41 Companies are
providing greater amounts and types of information on their web sites, which, as a result,
are increasingly viewed by investors as key sources of information about the company.42
As companies use their web sites to a greater extent to provide comprehensive infor-
mation about themselves, some have raised questions as to the treatment of information
posted on a company web site under the federal securities laws.43 We note that such ques-
tions have numerous implications under the federal securities laws.44
Although we have not addressed the question of whether and when information on a com-
pany’s web site is considered public for purposes of determining if a subsequent selective
disclosure of such information may implicate Regulation FD, we believe that in view of
the significant technological advances and the pervasive use of the Internet by companies,

investors and other market participants since 2000, it is now an appropriate time to provide
additional guidance regarding the public nature of disclosures on company web sites for
purposes of Regulation FD. Accordingly, we are providing guidance as to the circumstances
under which information posted on a company web site (whether by or on behalf of such
company) would be considered “public” for purposes of evaluating the (1) applicability of
Regulation FD to subsequent private discussions or disclosure of the posted information
and (2) satisfaction of Regulation FD’s “public disclosure” requirement.45
1. Whether and When Information Is “Public” for Purposes of the Applicability of
Regulation FD
Evaluating whether and when information posted on a company web site is public so
that a subsequent disclosure of that information to an enumerated person in Regulation
FD is not a disclosure of non-public information implicates many of the same issues that
Regulation FD itself was adopted to address.46 In particular, Regulation FD was adopt-
ed to address the problem of selective disclosure of material information by companies,
in which “a privileged few gain an informational edge—and the ability to use that edge
to profit—from their superior access to corporate insiders, rather than from their skill,
acumen, or diligence.”47 We must, therefore, keep that in mind when providing guidance
on when information is considered public for purposes of assessing whether a subsequent
selective disclosure may implicate Regulation FD. “In order to make information public,
it must be disseminated in a manner calculated to reach the securities market place in
general through recognized channels of distribution, and public investors must be afford-
ed a reasonable waiting period to react to the information.”48 Thus, in evaluating whether
information is public for purposes of our guidance, companies must consider whether
and when: (1) a company web site is a recognized channel of distribution, (2) posting of
information on a company web site disseminates the information in a manner making
it available to the securities marketplace in general, and (3) there has been a reasonable
waiting period for investors and the market to react to the posted information.
With respect to the first element of this analysis, as we have noted above, we believe that
a company’s web site can be a valuable channel of distribution for information about a
company, its business, financial condition and operations.49 As we discuss below, whether
a company’s web site is a recognized channel of distribution of information will depend
on the steps that the company has taken to alert the market to its web site and its disclosure
practices, as well as the use by investors and the market of the company’s web site.
With respect to the second element of the analysis, the question of what “disseminated”
means in the context of web site disclosure, we recognize that, today, news is disseminat-
ed in an electronic world—one in which the accessibility to the information is not limited
to reading a newspaper or the “broad tape.” There are now many different channels of
distribution of news and other information which account for the rapid dissemination of
news today (and also the corresponding capacity for rapid trading based on such infor-
mation). Because companies of all sizes now have the capacity to present information on

Regulation FD 4-21
their web sites to all investors on a broadly accessible basis, and because investors corre-
spondingly have the capability to easily find and retrieve information about companies by
searching the World Wide Web, we now analyze the concept of “dissemination” through
a changed lens. Consequently, we believe that, in the context of a company web site that
is known by investors as a location of company information, the appropriate approach
to analyzing the concept of “dissemination” for purposes of the “public” test as it relates
to the applicability of Regulation FD to a subsequent disclosure should be to focus on
(1) the manner in which information is posted on a company web site and (2) the timely
and ready accessibility of such information to investors and the markets.50
Some factors, though certainly non-exclusive ones, for companies to consider in evaluat-
ing whether their company web site is a recognized channel of distribution and whether
the company information on such site is “posted and accessible” and therefore “dissemi-
nated,” include:
• Whether and how companies let investors and the markets know that the
company has a web site and that they should look at the company’s web site
for information. For example, does the company include disclosure in its
periodic reports (and in its press releases) of its web site address and that it
routinely posts important information on its web site?
• Whether the company has made investors and the markets aware that it will
post important information on its web site and whether it has a pattern or
practice of posting such information on its web site;
• Whether the company’s web site is designed to lead investors and the mar-
ket efficiently to information about the company, including information
specifically addressed to investors, whether the information is prominently
disclosed on the web site in the location known and routinely used for such
disclosures, and whether the information is presented in a format readily
accessible to the general public;
• The extent to which information posted on the web site is regularly picked up
by the market and readily available media, and reported in, such media or the
extent to which the company has advised newswires or the media about such
information and the size and market following of the company involved.
For example, in evaluating accessibility to the posted information, compa-
nies that are well-followed by the market and the media may know that the
market and the media will pick up and further distribute the disclosures they
make on their web sites. On the other hand, companies with less of a market
following, which may include many companies with smaller market capital-
izations, may need to take more affirmative steps so that investors and others
know that information is or has been posted on the company’s web site and

that they should look at the company web site for current information about
the company;
• The steps the company has taken to make its web site and the information
accessible, including the use of “push” technology, 51 such as RSS feeds, or
releases through other distribution channels either to widely distribute such
information or advise the market of its availability. We do not believe, how-
ever, that it is necessary that push technology be used in order for the infor-
mation to be disseminated, although that may be one factor to consider in
evaluating the accessibility to the information;52
• Whether the company keeps its web site current and accurate;
• Whether the company uses other methods in addition to its web site posting
to disseminate the information and whether and to what extent those other
methods are the predominant methods the company uses to disseminate in-
formation; and
• The nature of the information.
The third element in evaluating whether and when information posted on a company’s
web site would be public for purposes of evaluating whether a subsequent selective
disclosure may implicate Regulation FD is whether investors and the market have been
afforded a reasonable waiting period to react to the information. What constitutes a rea-
sonable waiting period depends on the circumstances of the dissemination, which, in the
context of company web sites, may include:
• the size and market following of the company;
• the extent to which investor oriented information on the company web site is
regularly accessed;
• the steps the company has taken to make investors and the market aware that
it uses its company web site as a key source of important information about
the company, including the location of the posted information;
• whether the company has taken steps to actively disseminate the information
or the availability of the information posted on the web site, including using
other channels of distribution of information; and
• the nature and complexity of the information.53
We emphasize that companies must look at the particular facts and circumstances in deter-
mining whether the reasonable waiting period element is satisfied. What may be a reason-

Regulation FD 4-23
able waiting period after posting information on a company web site for a particular com-
pany and a particular type of information may not be one for other companies or other
types of information. For example, a large company that frequently uses its web site as a
key resource for providing information, has taken steps to make investors and the market
aware of this, and reasonably believes that its web site is well-followed by investors and
other market participants, may get comfortable with a waiting period that is shorter than a
waiting period for a company that is not in the same situation.
If the information is important, companies should consider taking additional steps to alert
investors and the market to the fact that important information will be posted—for example,
prior to such posting, filing or furnishing such information to us or issuing a press release
with the information. Adequate advance notice of the particular posting, including the date
and time of the anticipated posting and the other steps the company intends to take to pro-
vide the information, will help make investors and the market aware of the future posting of
information, and will thereby facilitate the broad dissemination of the information.
The question of what constitutes a reasonable waiting period has been frequently litigat-
ed in the context of insider trading.54 While we are not addressing when information is
“public” for purposes of insider trading, the cases in this area may provide guidance to
companies for purposes of Regulation FD. As we have noted, what constitutes a reason-
able waiting period is a facts and circumstances determination.
Hence, under the foregoing analysis, if information on a company’s web site is public,
then subsequent selective disclosure of that information—such as to an analyst in a pri-
vate conversation—would not trigger Regulation FD because such information, even if
material, would not be non-public.55 It is important to note that, although posting infor-
mation on a company’s web site in a location and format readily accessible to the gen-
eral public would not be “selective” disclosure, the information may not be “public” for
purposes of determining whether a subsequent selective disclosure implicates Regulation
FD. If, however, under the foregoing analysis, information on a company’s web site is not
public, then subsequent selective disclosure of that information, if material, may trigger
the application of Regulation FD.
2. Satisfaction of Public Disclosure Requirement of Regulation FD
Rule 101(e) of Regulation FD requires that once a selective disclosure has been made,
the company must file or furnish a Form 8-K or use an alternative method or methods of
disclosure that is reasonably designed to provide broad, non-exclusionary distribution of
the information to the public—simultaneously, in the case of an intentional disclosure, or
promptly, in the case of an unintentional disclosure.56 In adopting Regulation FD in 2000,
we discussed the role of company web sites in satisfying the alternative public disclosure
provisions of the regulation. At the time, we stopped short of concluding that disclosure
on a company web site would, itself, be an acceptable method of “public disclosure” of
material non-public information for purposes of compliance with Regulation FD, but we

recognized that web site disclosure and webcasting could constitute integral parts of a
model method of disclosure in satisfaction of the regulation. For disclosure solely via a
company web site, we stated that “[a]s technology evolves and as more investors have
access to and use the Internet…we believe that some companies, whose web sites are
widely followed by the investment community, could use such a method.”57
As we stated above in the context of whether information posted on a company web site
would be “public” so that a subsequent selective disclosure would not implicate Regu-
lation FD, we now believe that technology has evolved and the use of the Internet has
grown such that, for some companies in certain circumstances, posting of the information
on the company’s web site, in and of itself, may be a sufficient method of public disclo-
sure under Rule 101(e) of Regulation FD. Companies will need to consider whether and
when postings on their web sites are “reasonably designed to provide broad, non-exclu-
sionary distribution of the information to the public.”58 To do so, companies can look
to the factors we have outlined above regarding the first two elements of the analysis—
whether the company web site is a recognized channel of distribution and whether the
information is “posted and accessible” and, therefore, “disseminated.”59 As part of that
evaluation, companies also will need to consider their web sites’ capability to meet the
simultaneous or prompt timing requirements for public disclosure once a selective disclo-
sure has been made.60 Because the company has the responsibility for evaluating whether
a method or combination of methods of disclosure would satisfy the alternative public
disclosure provision of Regulation FD, it remains the company’s responsibility to evalu-
ate whether a posting on its web site would satisfy this requirement.61
Footnotes corresponding to SEC’s August 2008 interpretive release:
See Selective Disclosure and Insider Trading, Release No. 33-7881, at Section II.B.2 (Aug. 15, 2000) [65 FR 51715] (“Regulation
41
FD adopting release”).
42
See Section I, supra. There also has been significant growth in the use of the Internet by the public. As noted in the Internet Proxy
Release, research submitted to the Commission during the comment period indicated that approximately 80% of mutual fund investors
in the United States have access to the Internet in their homes. See Internet Proxy Release, supra note 10, at Section I.
The Federal Advisory Committee on Improvements to Financial Reporting requested that the Commission clarify this point in its
43
CIFiR Progress Report. See CIFiR Progress Report, supra note 1, at Chapter 4, Section III.
44
See 2000 Electronics Release, supra note 4.
45
We are not addressing issues relating to insider trading that may be implicated by disclosures on company web sites. In addition, our
guidance is not intended to modify the positions we have expressed regarding the Securities Act implications of disclosures on compa-
ny web sites, including when such disclosures may constitute offers or the implications for private offerings. For example, in the 2000
Electronics Release, we discussed the extent to which a company’s use of an Internet web site could constitute a “general solicitation.”
See 2000 Electronics Release, supra note 4, at Section II.C.2.
Our guidance also is not intended to address issues under Securities Act Rule 144(c)
[17 CFR 230.144(c)]. We note, for example, that the concept of “public information” for non-reporting companies contained in Rule
144(c)(2) is based on access. We believe that non-reporting companies should focus on the availability of information required by
Rule 144 rather than on dissemination of that information as further discussed in this section. Likewise, under Rule 144A(d)(1)(i) [17
CFR 230.144A(d)(1)(i)], sellers and persons acting on their behalf may look to publicly available financial statements for a prospec-
tive purchaser; and under Rule 144A(d)(4)(i), certain companies are required to provide access to specified company information
to security holders and prospective purchasers. As with Rule 144, the concept of dissemination as we discuss in this section is not a
condition to reliance on Rule 144A.
Regulation FD applies to closed-end investment companies but does not apply to other investment companies. Exchange Act Rule
101(b) [17 CFR.243.101(b)(definition of issuer for purposes of Regulation FD).

Regulation FD 4-25
46
See Regulation FD [17 CFR 243.100 et seq.].
47
See Regulation FD adopting release, supra note 41at Section II.A. In the Regulation FD adopting release, we stated our belief that
Regulation FD struck an appropriate balance. It established a clear rule prohibiting unfair selective disclosure and encouraged broad
public disclosure. We also believed that Regulation FD should not impede ordinary course business communications. See id. at Sec-
tion II.A.4.
48
Faberge., 45 S.E.C. 249, 255 (1973). See also Regulation FD adopting release, supra note 41, at Section II.B (“Information is non-
public if it has not been disseminated in a manner making it available to investors generally.”).
49
See Section I.B, supra. See Interactive Data proposing release, supra note 14.
50
In our recent proposals regarding interactive data, we stated that we believed that “web site availability of the interactive data would
encourage its widespread dissemination.” Interactive Data proposing release, supra note 14, at Section II.B.5. In that release, we rec-
ognized the increasing role that company web sites perform in supplementing the information filed electronically with the Commission
by delivering financial and other disclosure directly to investors. Id.
51
Push technology, or server push, describes a type of Internet-based communication where the request for the transmission of infor-
mation originates with the publisher or central server. It is contrasted with pull technology, where the request for the transmission of
information originates with the receiver or client.
52
Companies should also consider the extent to which their Internet infrastructure can accommodate spikes in traffic volume that may
accompany a major company development.
53
See Securities and Exchange Commission v. Texas Gulf Sulphur Co., 401 F.2d 833, 854 (2d Cir. 1968) (noting that “where the news
is of a sort which is not readily translatable into investment action, insiders may not take advantage of their advance opportunity to
evaluate the information by acting immediately upon dissemination”).
54
See SEC v. Ingoldsby, No. 88-1001-MA, 1990 U.S. Dist. LEXIS 11383 (D. Mass. May 15, 1990); SEC v. MacDonald, 568 F.Supp.
111, 113 (D.R.I. 1983), aff’d, 725 F.2d 9 (1st Cir. 1984); SEC v. Materia, No. 82 Civ. 6225, 1983 U.S. Dist. LEXIS 11130 (S.D.N.Y.
Dec. 5, 1983); DuPont Glore Forgan, Inc. v. Arnold Bernhard & Co., Inc., No. 73 Cov. 3071, 1978 U.S. Dist. LEXIS 20385 (S.D.N.Y.
Mar. 6, 1978). See also In re Apollo Group Inc. Sec. Litig., 509 F.Supp. 2d 837, 846(D. Ariz. 2007) (In this securities-fraud class
action, the Court declined to adopt a bright-line rule presuming an immediate market reaction, based on the efficient market theory,
and instead focused on the specific facts of each case.); In re Crossroads Sys., Inc., 2002 U.S. Dist. LEXIS 26716, (W.D. Tex. Nov.
22, 2002), aff’d, Greenberg v. Crossroads Sys., Inc., 364 F.3d 657, 660-661 (5th Cir. 2004) (In this securities-fraud class action, the
Court employed a two-day window, concluding that an efficient market will digest unexpected new information within two days of its
release.).
55
The standard to satisfy “public disclosure” in Regulation FD following a selective disclosure is governed by Rule 101(e).
56
See Rules 100(a) and 101(e) of Regulation FD.
57
See Regulation FD adopting release, supra note 41, at Section II.B.4.b.
58
See Rule 101(e)(2) of Regulation FD.
59
Under Regulation FD, when an issuer makes a selective disclosure, it must also provide general public disclosure, either simultane-
ously or promptly. Thus, the third element of the public test we discuss above—whether investors and the market have been afforded a
reasonable waiting period to react to the information—does not apply in analyzing whether the general public disclosure requirements
of Regulation FD have been satisfied.
60
For purposes of Regulation FD, a posting on a blog, by or on behalf of the company, would be treated the same as any other posting
on a company’s web site. The company would have to consider the factors outlined above to determine if the blog posting could be
considered “public.”
61
We recognized in Regulation FD that “the issuer may use a method ‘or combination of methods’ of disclosure, in recognition of the
fact that it may not always be possible or desirable for an issuer to rely on a single method of disclosure as reasonably designed to
effect broad public disclosure.” “[A]n issuer’s methods of making disclosure in a particular case should be judged with respect to what
is ‘reasonably designed’ to effect broad, non-exclusionary distribution in light of all the relevant facts and circumstances.” Regulation
FD adopting release, supra note 41.

c. Interpretive Guidance: Social Media Guidance
In April 2013, the SEC issued a Section 21(a) Report of Investigation providing guidance on the ap-
plication of Regulation FD to disclosures made through social media (Rel. No. 69279). The report
affirms that a company may use social media to disclose material nonpublic information to inves-
tors without violating Regulation FD—provided the company makes investors aware in advance of
which social media channels it expects to use so that they know where to look for the information
or what they need to do to be in a position to receive it.
The Section 21(a) Report was triggered by the SEC’s inquiry into a July 2012 post made by Netflix’s
CEO on his personal Facebook page announcing a milestone in the company’s monthly usage num-
bers. Netflix did not disclose the information by a press release or Form 8-K, the CEO’s Facebook
page had not previously been used to announce company metrics, and the CEO had previously public-
ly stated that the company didn’t use social media to communicate material information to investors.
In the Section 21(a) Report, the SEC clarifies that its 2008 interpretive guidance on the use of
corporate websites—and specifically the concept that investors should be alerted to the channels
of distribution a company will use to disseminate material information—applies equally to, and
provides the relevant framework for, evaluating whether a company’s social media disclosures
satisfy Regulation FD. The report emphasizes the SEC’s expectation that companies will “examine
rigorously” the non-exhaustive list of factors included in the 2008 guidance to evaluate whether a
particular social media channel is a “recognized channel of distribution” for communicating with
their investors.
The report concludes that, while every case must be evaluated on its own particular facts, the “disclo-
sure of material, nonpublic information on the personal social media site of an individual corporate
officer, without advance notice to investors that the social media site may be used for such purpose,
is generally unlikely to qualify as a method ‘reasonably designed to provide broad, non-exclusionary
distribution of the information to the public’ within the meaning of Regulation FD.”
III. How the Rules Work
a. Understanding Reg FD’s Basics
Designed to Promote Fairness
Regulation FD regulates how companies provide disclosure to the market and is designed to create
a level playing field for all investors.
Regulation FD provides that when a company, or any person acting on its behalf, discloses materi-
al, nonpublic information to certain enumerated persons (in general, securities market professionals
or holders of the issuer’s securities), then the company must make public disclosure of the informa-
tion. The timing of the required public disclosure depends on whether the selective disclosure was
intentional or unintentional. For an intentional selective disclosure, the company must make public

Regulation FD 4-27
disclosure simultaneously; for an unintentional disclosure, the company must make public disclo-
sure promptly.
The SEC adopted Regulation FD in Release No. 33-7881 (Aug. 15, 2000).
Reg FD is a Disclosure Rule
The SEC adopted Regulation FD to protect investors. The SEC’s primary concern was that selec-
tive disclosure, and the perception of selective disclosure, leads to a loss of investor confidence in
the integrity and fairness of the market. The SEC was also concerned about rumored instances of
companies using material information to curry favor with analysts.
Regulation FD isn’t meant to change the substance of disclosure itself, but it may indirectly impact
the types of information that companies voluntarily decide to disclose, when to disclose particular
information, and how to disclose it.
Regulation FD represented a fundamental change in the SEC’s approach to selective disclosure.
Before Regulation FD was adopted in 2000, the SEC relied on Rule 10b-5 to bring selective disclo-
sure enforcement cases. Now, companies engaging in selective disclosure practices also violate a
disclosure regulation.
Regulation FD was supported by the vast majority of a record volume of comment letters (over
6,000), most of which were from retail investors.
Reg FD Changed Disclosure Practices
Although Regulation FD doesn’t change the law regarding general duties to disclose (i.e., absent
special circumstances, companies still can control when they want to make a disclosure), its adoption
prompted many companies to make more disclosure and impacted the content of their disclosures.
In a 2001 ABA member survey, 47% of respondents indicated that their client companies had been
providing more information to analysts and investors since the adoption of Regulation FD—with
25% indicating they were providing the same amount of information and 27% indicating they
were providing less. Regarding disclosure content, 80% of respondents indicated that their clients’
disclosure practices had changed for publishing forward-looking information or otherwise making
forward-looking information public—with the balance indicating no change. Of those providing
narrative responses as to how their clients’ practices had changed, a substantial majority indicated
that they were providing more forward-looking information generally, and doing so publicly (i.e.,
in accordance with Regulation FD’s public disclosure requirement rather than selectively), than was
the case prior to the adoption of Regulation FD.
At the same time, as expected, companies reduced the number of investor conferences and one-
on-one meetings with analysts once Regulation FD was adopted. According to the results of the
ABA survey, 81% of the 59 respondents indicated that most of their clients conducted one-on-one
meetings with analysts before Regulation FD. After Regulation FD, this percentage dropped to
29%.

Although companies are communicating less directly with analysts regarding earnings information,
consistent with the SEC’s discussion in the Regulation FD adopting release, many companies still
regularly communicate with analysts regarding immaterial matters, which is not a violation of
Regulation FD even if the immaterial matter happens to be the last piece in a puzzle so that the
analyst comprehends a material development for the company.
The following describes changes in disclosure practices as a result of Regulation FD. In

general, companies:
– Open their conference calls to the public and do not limit them to just analysts
– Provide more detail in their calls, including more forward-looking information, but also
provide less original content than what was mentioned in related press releases
– Participate in fewer investor conferences and hold fewer sidebars with analysts during the
conferences
– Have longer and more frequent Regulation FD blackout or quiet periods
– Participate in fewer one-on-one meetings and phone calls to discuss earnings-related infor-
mation
– Do not privately reaffirm analysts’ earnings guidance or the company’s prior guidance
– Institute formal disclosure policies
– Include information about how to access their webcasts and conference calls in their earn-
ings releases
Reg FD Changed Traditional Analyst Roles
Since the adoption of Regulation FD, analysts have been required to conduct more analysis on their
own and focus more on the long-term prospects of a company. They can no longer be “spoon-fed”
earnings information or financial models from CFOs or investor relations officers, as this would
constitute impermissible selective disclosure by the company under Regulation FD.
Types of Companies Subject to Reg FD
Under Rule 101(b) of Regulation FD and as discussed in Section II.B.5 of the Regulation FD
adopting release, U.S. reporting companies are subject to Regulation FD—that is, all companies
required to file reports with the SEC under Section 12 or Section 15(d) of the Securities Exchange
Act of 1934, including closed-end investment companies, but not including other investment com-
panies, foreign governments or foreign private issuers.
In situations where a company has received notice from a stock exchange that the exchange is
de-listing the company’s stock, even though the company’s SEC reporting obligations have been
suspended, Regulation FD likely still applies.

Regulation FD 4-29
Foreign Private Issuers Not Subject to Reg FD
Foreign private issuers are not covered by Regulation FD. The SEC originally proposed to make
foreign private issuers subject to Regulation FD, but then decided to exclude them and reconsider
this exclusion when it proposed changes to the special disclosure framework applicable to foreign
issuers (which never happened). In the Regulation FD adopting release, the SEC noted that SRO
regulations may require foreign private issuers listed on U.S. exchanges to make timely disclosure
of material information and implicitly urged the SROs to enforce these regulations.
The NYSE, for example, requires its listed companies, including foreign private issuers, to timely
release to the public any news or information that might reasonably be expected to materially affect
the market for their securities so that investors have equal access to material corporate information
as soon as it becomes available. Foreign private issuers (as well as other listed companies) are per-
mitted to comply with the NYSE policy by using any Regulation FD-compliant method, including
by filing a Form 6-K, notwithstanding the fact that they are not subject to Regulation FD.
Foreign companies that do not file reports with the SEC are not subject to the U.S. securities laws
that require disclosure. Only U.S. anti-fraud rules apply to them.
Only “Senior Officials” & Enumerated Others Covered
Not all employees are directly responsible for complying with Regulation FD. Rule 101(c) of Reg-
ulation FD defines a “person acting on behalf of the issuer” as (1) any “senior official” of the issuer;
or (2) any other officer, employee or agent of an issuer who regularly communicates with (a) bro-
ker/dealers and their associated persons; (b) investment advisers, institutional investment managers,
hedge funds, and their associated persons; (c) investment companies and their affiliated persons; or
(d) any holder of the issuer’s securities, under circumstances in which it is reasonably foreseeable
that the holder will purchase or sell the issuer’s securities on the basis of the information.
Rule 101(f) defines “senior official” as any director, executive officer, investor relations or pub-
lic relations officer, or other person with similar functions. In footnote 36 of the Regulation FD
adopting release, the SEC identified the types of employees whose job typically consists of regular
communication with securities market participants.
In other words, Regulation FD applies only to “senior officials” and those individuals believed by
the SEC to regularly communicate with enumerated securities market participants (e.g., investors,
analysts) regardless of seniority or title. More specifically, it applies to:
– Directors and executive officers;

– Persons performing investor relations or public relations functions; and
– Employees and agents who regularly communicate with those market participants enu-
merated in the rule, predominantly consisting of securities market professionals and
security holders

Perhaps the biggest challenge for companies is educating their executive officers and directors
who normally do not speak publicly on behalf of their companies; even though they may perceive
themselves as outside of the scope of this rule, by its terms, their communications are subject to
Regulation FD. As discussed below, periodic education and training and corporate policies are the
best tools to help companies avoid Regulation FD violations.
Directors Deemed to Act on Behalf of Company
If a director discloses material non-public information to a securities market professional or

covered investor, absent one of the express exclusions set forth in Rule 100(b)(2), it is likely
a violation of Regulation FD. The director is a “senior official” as defined in Rule 101(f) of
Regulation FD, and thus deemed to be a “person acting on behalf of an issuer” as defined in Rule
101(c), for purposes of Rule 100(a), in making the disclosure of material nonpublic information.
In Regulation FD CDI 101.11, the SEC suggested that companies whose directors are authorized
spokespersons and plan to speak privately with shareholders should consider implementing policies
and procedures to help avoid Regulation FD violations and/or obtain confidentiality agreements
from such shareholders such that the communications are excluded from the rule’s coverage. This
same guidance would apply to communications with other covered securities market participants
such as analysts.
VC-Appointed Directors May Face Conflicts of Interest
Venture capital firms often require that representatives of the firm be appointed to the board of
directors of the portfolio company. While venture capital-appointed directors are often expected to
report confidential information of the portfolio company to their venture capital firm, they also have
a fiduciary duty of loyalty to the company and are “senior officials” under Regulation FD.
While a discussion of conflicts of interest is outside the scope of this Chapter, venture capitalists
who also are directors of their portfolio companies must be cognizant of which hat they are wearing
and the associated fiduciary duties, and anticipate potential conflicts and implement mechanisms
to deal with these conflicts such as adoption of and policies regarding use of informational barriers
within the venture capital firm, firm formation documents that provide for compliance with fiducia-
ry duties to the portfolio company (even if exercising such duties would conflict with fiduciary du-
ties to the firm), recusal from company board discussions where appropriate, etc. The key is to keep
in mind that venture capital-appointed directors are subject to the same fiduciary duty obligations as
other directors and must act accordingly.
Regulation FD does not apply to companies that are private or going public; therefore, venture cap-
italists face these issues only if they remain on the board after the company goes public.
Only Disclosures to Enumerated Market Participants Covered by Reg FD
Absent a specified exclusion, Regulation FD (Rule 100(b)(1)) applies to covered disclosures made
by or on behalf of the company only to what may be described as “securities market professionals”
consisting of (a) broker/dealers and their associated persons, (b) investment advisers, institutional

Regulation FD 4-31
investment managers, hedge funds, and their associated persons, and (c) investment companies and
their affiliated persons, and (d) the company’s security holders under those circumstances in which
it is reasonably foreseeable that the security holder will purchase or sell the company’s securities on
the basis of the information.
Reg FD Expressly Excludes Certain Types of Disclosures
Even if they are among the enumerated securities market participants, Regulation FD
(Rule 100(b)(2)) specifically excludes from coverage disclosures made:
1. To persons who owe the issuer a duty of trust or confidence (e.g., temporary insiders such as
an attorney, investment banker, or accountant);
2. To persons who expressly agree to maintain the information in confidence; and
3. In connection with most offerings of securities registered under the Securities Act.
Senior Officer Can’t Avoid Reg FD by Directing Others to Make Disclosure
No other employees are directly impacted by Regulation FD unless acting at the direction of a
“senior official.”
In the Regulation FD adopting release, the SEC made clear that, based on Exchange Act Section
20(b), companies can’t avoid having their communications be subject to Regulation FD (i.e., cir-
cumvent the rule) merely by having a non-covered person make the selective disclosure. Section
20(b) provides, “It shall be unlawful for any person, directly or indirectly, to do any act or thing
which it would be unlawful for such person to do under the provisions of this title or any rule or
regulation there under through or by means of any other person.”
So, for example, if a senior officer covered by Regulation FD directs another employee who is
not among those enumerated in the rule to make a selective disclosure, the senior officer will be
deemed responsible for having made the disclosure.
Note, however, that even though Regulation FD applies only to the company’s “senior officials”
and those individuals believed by the SEC to regularly communicate with enumerated securities
market participants, leaks of material non-public information by non-covered employees often vio-
late company confidentiality policies and, as discussed below, may trigger an obligation on the part
of the company to make an undesirable public disclosure in any event and expose the employee to
insider trading liability.
Reg FD Policies & Procedures Should Be Adopted and Enforced
Implementation and adherence to appropriate policies and periodic education and training are the best
tools to help companies promote compliance with Regulation FD and avoid Regulation FD violations.
Recent case law and SEC enforcement actions certainly suggest that establishing and adhering to a
formal Regulation FD policy—whether it’s a separate, standalone document or a robust component

of existing insider trading & confidentiality policies—will be among the several factors considered
by the SEC in determining a company’s liability for its employees’ misconduct.
Identify Who Is Authorized to Make Disclosures
Companies should specifically identify, in writing, which persons are authorized to make
disclosures to, or respond to field inquiries from, securities market participants. The SEC does not
require companies to identify spokespersons, but has acknowledged that this formal identification
effectively resolves any uncertainty regarding who is covered by Regulation FD. This position was
affirmed by the SEC Staff in Regulation FD CDI 101.10.
Ideally, the number of spokespersons identified should be as few as the company deems reasonably
possible. In footnote 44 of the Regulation FD adopting release, the SEC referred to its Regulation
FD proposing release (Rel. No. 34-42259 (December 20, 1999)) wherein it suggested that
companies designate a limited number of authorized spokespersons as one means to mitigate
concerns that the general materiality standard in Regulation FD would lead to litigation and a
chilling effect on corporate disclosures.
A company is not liable under Regulation FD if an unauthorized person selectively discloses

material nonpublic information to a securities market participant in breach of its duty of trust
or confidence. Therefore, as noted by the SEC in footnote 37 and the accompanying text of the
Regulation FD adopting release, a company is not responsible when one of its employees or
officials improperly trades or tips; however, the employee or official could be liable for insider
trading as well as violation of company policies.
Require Unauthorized Employees to Make Referrals to Authorized Spokespersons
Companies should specifically require unauthorized employees (i.e., employees not authorized to
make disclosures to, or field inquiries from, securities market participants) who receive inquiries
from analysts, investors and other securities market participants enumerated by Regulation FD
to make referrals to the company’s authorized spokespersons. Companies can protect themselves
by specifically requiring such referrals and prohibiting unauthorized employees from engaging in
discussions with securities market participants in a written company policy.
Covering these matters in a corporate policy is one means of communicating the law and the company’s
standards to its employees, and enables companies to take action against employees for infractions.
b. “Material” & “Nonpublic” Information under Reg FD
Traditional Definitions of Materiality Apply
Although Regulation FD does not provide a definition of materiality, the SEC uses the same definition
of materiality under Regulation FD that it applies in fraud actions. Information is “material” if
there is a substantial likelihood that a reasonable investor would consider it important in making an
investment decision. There must be a substantial likelihood that the information would have been

Regulation FD 4-33
viewed by a reasonable investor as having significantly altered the total mix of information made
available.
In Section II.B.2 of the Regulation FD adopting release, the SEC discussed materiality and cited
these seminal “materiality” cases: TSC Industries v. Northway, 426 U.S. 438 (1976) and Basic v.
Levinson, 485 U.S. 224 (1988).
Enumerated Matters Warrant Review
In Section II.B.2 of the Regulation FD adopting release, the SEC provided a non-exhaustive list of
types of information or events that it indicated should be reviewed carefully to determine whether
they are material, including information relating to:
– Earnings information;
– Mergers, acquisitions, tender offers, joint ventures, or changes in assets;
– New products or discoveries, or developments regarding customers or suppliers (e.g., the
acquisition or loss of a contract);
– Changes in control or in management;
– Change in auditors or auditor notification that the issuer may no longer rely on an auditor’s
audit report;
– Events regarding the issuer’s securities (e.g., defaults on senior securities, calls of securities
for redemption, repurchase plans, stock splits or changes in dividends, changes to the rights
of security holders, public or private sales of additional securities); and
– Bankruptcies or receiverships.
In 2018 (via Release No. 33-10459), the SEC also reminded companies that information about
cybersecurity risks or incidents may be “material”—and should be covered in FD policies.
Based on the SEC’s guidance, companies should assume that these matters are material unless they
can demonstrate with compelling evidence that they are not. Earnings-related information should
always be presumed material. For example, guidance as to future results is considered material, as
well as any information relating to missing or meeting earnings expectations (unless it is a reaffir-
mation of a recent public statement).
While the list is not exhaustive, these categories of information may help in analyzing whether
other types of disclosures are material. The list is noteworthy because the SEC has long resisted
requests to identify situations that are likely to be deemed material. The SEC made this concession
for Regulation FD, recognizing that it would be difficult for companies to make quick materiality
judgments under the relatively obscure facts and circumstances definition of materiality, while still
acknowledging that the list is not exclusive and is not intended to indicate that each of the enumer-
ated items is per se material.

Materiality Not Presumed with Form 8-K
In Section II.B.4.a of the Regulation FD adopting release, the SEC acknowledged concerns of
commenters that use of a Form 8-K could be considered a materiality admission, and noted that
it would not make this presumption. The release explicitly provides that filing or furnishing
information on Form 8-K is not itself an admission that the information is material; however, the
information still may be deemed material.
Companies historically have disclosed information on Form 8-K if there was any debate about
materiality and wanted the safe harbor protection. Therefore, if a company uses a Form 8-K,
this usually signifies that the information disclosed is considered more material than information
distributed solely by issuance of a press release.
Consider SAB No. 99 in Materiality Analysis
In Staff Accounting Bulletin No. 99, the SEC provides guidance in applying materiality thresholds
to the preparation of financial statements filed with the SEC and the performance of audits of those
financial statements. In the Regulation FD adopting release, the SEC cited to SAB No. 99 in a
footnote without further explanation in connection with its discussion of materiality with reference
to existing case law.
Among other matters, SAB No. 99 makes clear that materiality is not tied to a bright line quantitative
standard, such as the familiar 5% threshold “rule of thumb” (often used by companies to gauge the
materiality of particular impacts or circumstances). SAB No. 99 is referenced only in footnote 38 of
the Regulation FD adopting release—but it is referenced along with the U.S. Supreme Court cases
that have long interpreted and defined materiality in the Rule 10b-5 context. In Ganino v. Citizens
Utility Co., 228 F.3d 154 (2d Cir. 2000), the Second Circuit applied SAB No. 99 and found that it
was not inconsistent with existing law in finding that the inclusion of 1.7% of fees in revenue was
material.
While it is unclear whether or how the SEC intended that SAB No. 99 apply beyond the scope of
financial statements in the Regulation FD context, many legal practitioners interpret the SEC’s
notation to mean that companies should take SAB No. 99 into account generally when assessing
materiality for Regulation FD purposes by considering both qualitative and quantitative factors.
Materiality Determinations Assessed by Regulators in Hindsight
Courts and the SEC have long wrestled with the definition of materiality in anti-fraud cases brought
under the securities laws. As the determination of materiality is frequently evaluated in hindsight,
companies worry about being second-guessed by the SEC or the plaintiffs’ bar.
Determining “materiality” probably is the most challenging aspect of interpreting and applying
Regulation FD. In fact, as noted above, in Section II.B.2 of the Regulation FD adopting release,
the SEC provided a non-exhaustive but extremely helpful list of information and events that it
indicated should be reviewed carefully to determine whether they are material.

Regulation FD 4-35
“Mosaic” Theory Under Reg FD
In Section II.B.2 of the Regulation FD adopting release, the SEC made clear that companies
may selectively disclose information that is immaterial to a reasonable investor, but that may be
significant to an analyst who uses the information, together with other information, to complete
a “mosaic” of information that is material itself. Such disclosure would not be deemed to violate
Regulation FD. The SEC Staff reiterated this concept in Regulation FD CDI 101.03.
This mosaic theory—previously articulated in case law—highlights the fact that what counts is
whether the information is material to a “reasonable investor,” not whether the information may
ultimately be material to a more knowledgeable person like an analyst.
A court first articulated the mosaic theory in Elkind v. Liggett & Myers, 635 F.2d 156 (2d Cir.
1980). This theory is similar to the “pieces of a jigsaw puzzle” analogy used in SEC v. Bausch &
Lomb, 420 F. Supp. 1226 (S.D.N.Y. 1976).
Interestingly, the SEC also stated in the Regulation FD adopting release that a company would
not be liable for providing immaterial information as long as it did not know that this information
is part of a material mosaic. (“At the same time, an issuer is not prohibited from disclosing a
non‑material piece of information to an analyst, even if, unbeknownst to the issuer, that piece
helps the analyst complete a “mosaic” of information that, taken together, is material.”) This
“unbeknownst to the company” concept is new to the mosaic theory, and it is uncertain whether this
new condition would stand up in court, as existing case law does not recognize this concept.
Note, however, that companies cannot avoid liability simply by devising schemes to pass on
material information under the guise of the mosaic theory. The SEC made this point in the
Regulation FD adopting release with this comment: “Similarly, an issuer can not render material
information immaterial simply by breaking it into ostensibly non-material pieces.”
Materiality Based on Facts & Circumstances
Materiality judgments are facts and circumstances-specific; there is no bright-line standard or list of
items that can define materiality in all cases. Materiality is determined from the perspective of the
“reasonable investor”—not the actual recipient.
Based on the SEC’s guidance, companies should assume that the enumerated matters warranting
careful review identified in the Regulation FD adopting release are material unless they can demon-
strate with compelling evidence that they are not. Earnings-related information should always be
presumed material. The SEC stressed in the Regulation FD adopting release that private conversa-
tions with analysts regarding earnings carry a “high degree of risk.”
Unfortunately, companies find that many situations are difficult to evaluate. These gray areas
continue to be a bone of contention for many commentators. If a company finds it difficult to make a
determination as to whether a particular piece of information is material, it is wise to assume that it is,

and not disclose the information selectively until other facts and circumstances (which may include
observing how most companies treat similar information) support a determination of immateriality.
While legal advice concerning materiality sought and given in good faith may benefit the company
in an SEC enforcement action, the SEC has cautioned that reliance on counsel will not necessarily
provide a successful defense in all cases—the availability of any reliance on counsel argument turning
on all the facts and circumstances of the case. (See Report of Investigation Pursuant to Section 21(a) of
the Securities Exchange Act of 1934: Motorola, Release No. 34-46898 (Nov. 25, 2002), where Motorola
was credited with its reliance on counsel because the SEC understood that legal advice was sought and
given in good faith.) In a 2001 ABA member survey, prior to the adoption of Regulation FD, only 5% of
respondents indicated that their client companies had been requesting their advice as to the materiality
of information that they disclosed to analysts or other covered persons under Regulation FD all the time,
whereas, after the adoption of Regulation FD, this percentage increased to 35%. Prior to the adoption of
Regulation FD, 42% of respondents indicated that their clients seldom requested their advice as to the
materiality of information that they disclosed to analysts or other covered persons under Regulation FD,
whereas after the adoption of Regulation FD, this percentage declined to 2%.
Conferring with legal counsel can also show that the company was not reckless, but if counsel
believes that the information is material and the company chooses not to disclose it, then such a
decision may be evidence of recklessness.
Consider Designating Disclosure Team for Materiality Evaluations
To make materiality judgments on the “real time” basis that Regulation FD requires, although
not required under the rule, if it has not already done so, the company should consider creating a
disclosure team or designating another group of company representatives responsible on an ongoing
basis for making these determinations in order to enhance the efficiency and consistency of the
company’s decision-making. (Note, however, that the SEC did recommend that companies create
a committee with responsibility for considering the materiality of information and determining
disclosure obligations on a timely basis in connection with its rules implementing Sarbanes-Oxley
Section 302 regarding CEO/CFO certifications.)
This is one means to conduct and demonstrate the performance of a carefully considered evaluation
based on the particular facts and circumstances. (See Report of Investigation Pursuant to Section
21(a) of the Securities Exchange Act of 1934: Motorola, Release No. 34-46898 (Nov. 25, 2002),
where the SEC indicated that it encourages—and in that case gave Motorola credit for—“honest,
carefully considered attempts to comply with Regulation FD.”)
The disclosure team or other designated company representatives should be fully knowledgeable about:
– The company;
– The company’s prior public statements;
– What analysts have communicated about the company;

Regulation FD 4-37
– What journalists have communicated about the company;

– What analysts and journalists have communicated about the company’s industry and
competitors; and
– What Regulation FD requires.
The investor relations officer or other designated official(s) should also track the trends of how
companies and the SEC are treating differing types of disclosures, monitor how different types
of disclosures impact the company’s stock price (as a factor to consider in evaluating future
materiality determinations), and maintain a comprehensive file of all corporate communications—
ranging from press releases to earnings call transcripts to SEC filings—as a reference tool to
quickly determine what information has been made public.
Disclosure Team Typically Composed of Legal, IR, Communications, Finance
For those companies designating a disclosure team or group of representatives to handle materiality
evaluations on a regular basis, most companies rely on a combination of their legal, investor
relations, corporate communications, and finance department personnel to manage their disclosure
process. Outside securities counsel also should be consulted if necessary or appropriate. Regulation
FD warrants more coordination between and among departments and a more formal review process
for any potentially material information than may have been the case historically.
High “Knowing” or “Reckless” Standard Applies to Materiality Judgments
The SEC applies a relatively high “knowing” or “reckless” standard to judgments of materiality
under Regulation FD, having incorporated this standard into the Rule 101(a) definition of
“intentional.” In order for a selective disclosure to be deemed intentional under Regulation FD, the
person making the disclosure must know or be reckless in not knowing that the information they
are communicating is both material and nonpublic. The SEC defined “reckless” in this context
relative to existing definitions of fraud from case law (indicating that Regulation FD “essentially
incorporates the knowing or reckless mental state required for fraud into this disclosure provision”),
which defines reckless as an “extreme departure from the standards of ordinary care.”
The SEC noted that this standard serves as a significant safeguard against inappropriate liability in
that the SEC needs to prove knowing or reckless conduct in enforcement actions under Regulation
FD. Mistaken materiality determinations that are not reckless should not entail the risk of an
enforcement action, thus providing additional assurance to companies that they will not be second
guessed for mistaken judgments of materiality in close cases.
As a result, companies that act in good faith to comply with Regulation FD are unlikely to be
considered reckless. In fact, the SEC stated in the Regulation FD adopting release that liability for
mistaken materiality judgments “will arise only if no reasonable person under the circumstances
would have made the same determination.” However, the SEC also noted that a “pattern” of

“mistaken” materiality judgments would make a claim that any particular disclosure was not
intentional less credible.
The SEC stated that the reasonableness of a materiality judgment is evaluated considering the
relevant facts and circumstances. In other words, a materiality judgment that might be reckless
in a prepared written statement may not be reckless as an impromptu answer to an unanticipated
question.
Market Reaction May Indicate Materiality
Information is more likely to be considered material if it significantly impacts a company’s stock

price. Even though the legal definition of “materiality” does not directly address stock price
movement, such movement is one of the clearest indicators of reasonable investors’ views as to
the significance of the information. The problem is that it is difficult to know in advance how the
stock price will be impacted or how the market will react to information that a company reasonably
believes is immaterial.
In the text of Staff Accounting Bulletin No. 99 and accompanying footnotes 16 and 17, the SEC
Staff discussed the fact that actual stock price movements by themselves should not determine, but
may provide guidance as to, materiality, and that expected significant market reaction should be
taken into account when considering the materiality of known misstatements. While it is unclear
whether or how the SEC intended that SAB No. 99 apply beyond the scope of financial statements
in the Regulation FD context, many legal practitioners interpret the SEC’s notation to mean that
companies should take SAB No. 99 into account when assessing materiality for Regulation FD
purposes by considering both qualitative and quantitative factors.
SEC enforcement actions have demonstrated that the SEC will look to market reaction (e.g., significant
movements in stock trading price and volume) as an indicator (albeit, not determinative) of materiality.
If a company makes a selective disclosure that it believes is immaterial, but the market reaction
suggests otherwise, the company should consider promptly issuing a Regulation FD-compliant
press release pursuant to the rule’s non-intentional selective disclosure requirements and ensure that
it has documented the reasons why it originally determined the information was not material.
Private Guidance Reaffirmations Okay in Limited Circumstances
Private confirmations of previously publicly disclosed earnings forecasts can be made without
triggering Regulation FD’s public disclosure requirements in certain circumstances; however,
companies should assume that they cannot discuss earnings information privately with securities
market participants without the earnings information being considered “material” and the private
communications thus constituting a violation of Regulation FD absent application of one of the
exclusions set forth in the rule.
In Regulation FD CDI 101.01, the SEC Staff addressed factors companies should consider in
determining whether a selective confirmation of a previously publicly made forecast would be

Regulation FD 4-39
deemed material and thus a violation of Regulation FD. The SEC Staff notes that the timing of the
reaffirmation is the principal factor in determining whether additional material information has been
conveyed (only a few days likely will not raise an issue, but a week or longer can increase the risk).
Statements about being “on track” are arguably as material as stating “we’re not on track.” Privately
communicating that expectations are now lower or higher than what was last publicly provided is
always problematic. Private reaffirmations of guidance late in the earnings cycle for a given period
are very risky, given that companies typically have a good idea about their results by that point.
The occurrence of relevant (under the circumstances) intervening events may bear on a materiality
determination.
At least one enforcement proceeding under Regulation FD confirms that the SEC continues to focus
on where in the earnings cycle the reaffirmation occurs. In SEC v. Flowserve, SEC Lit. Rel. No.
19154 (Mar. 24, 2005), a company was subject to sanction due to management’s reaffirmation of
earnings guidance that had been publicly disclosed less than four weeks before, although it was 42
days before the end of the fiscal year.
In surveys conducted in 2005, 2006, 2010 and 2011 by TheCorporateCounsel.net regarding

Regulation FD practices, a clear majority of respondents (72%, 61%, 76% and 64% for each
of those survey years) indicated that their companies do not allow private reaffirmations of
earnings information. Between 8% and 11% of respondents in each of those years indicated that
their companies permit private reaffirmations, but don’t have a “rule of thumb” as to when such
reaffirmations are permitted; rather, their companies require confirmation of no material change
with the CEO, general counsel, etc. Another between 6% and 11% of respondents (taking into
account all four survey years) indicated that their companies had a rule of thumb allowing for
private reaffirmations up to one week after the company’s earnings announcement.
“Nonpublic” Information Largely Defined By Reference to Case Law
If information has not been disseminated in a manner making it widely available to investors, then
the information is nonpublic for Regulation FD purposes. Case law defines nonpublic information
similarly, but the SEC clarified the meaning for disseminations made on Form 8-K for Regulation
FD purposes.
Under case law, the markets must have a reasonable period of time to digest any material
information that is broadly disseminated before the information will be considered “public.” What
constitutes a “reasonable” period of time depends on the circumstances of the dissemination (e.g.,
a few hours for a widely followed company and a few days for a company whose releases are not
carried by the major business wire services).
However, if a company is using Form 8-K as its dissemination method, the SEC made clear that a
company only needs to file or furnish the Form 8-K and confirm its acceptance for filing and public
availability on Edgar before making a selective disclosure of that information. In other words, the
information will then be deemed to be public for Regulation FD purposes without regard to whether
the company believes that sufficient time has passed for the information to have been digested by
the markets.

Information is not considered public if the company was not the source of the information or if it is
unclear whether someone from the company was the source. For example, a media report that cites
unnamed sources from the company probably is insufficient for the information to be considered to
have originated with the company.
In footnote 40 and the accompanying text of the Regulation FD adopting release, the SEC
discusses when information is nonpublic with reference to existing case law. In Regulation FD CDI
102.03, the SEC Staff clarified that companies need to confirm that Exchange Act reports—filed
or furnished—have been accepted for filing on Edgar and are publicly available on Edgar before
making disclosure to a limited audience for Regulation FD purposes.
c. Website & Social Media Disclosures As “Public”
SEC’s Analytical Framework
The SEC’s interpretive release on the use of company web sites (Rel. No. 34-58288 (August 2008))
instructs companies as to how to analyze, based on their particular facts and circumstances, whether
information posted on the company’s website is deemed “public” for purposes of evaluating
whether a subsequent selective disclosure violates Regulation FD, and whether website posting of
information itself satisfies the “public disclosure” requirement of Regulation FD upon the making
of a selective disclosure (whether intentional or non-intentional).
In Section II.A.1 of that release, the SEC set forth three elements that companies must consider in
their analysis of whether information is deemed to be “public” for purposes of evaluating whether a
subsequent selective disclosure violates Regulation FD. If information (even material information)
on the company’s website is deemed public then, by its terms, a subsequent selective disclosure
won’t trigger Regulation FD.
A company must consider whether and when:
– The company’s web site is a recognized channel of distribution;
– The posting of the information disseminates it in a manner making it available to the

securities marketplace in general (i.e., the manner in which information is posted, and the
timely and ready accessibility of the information to investors and the markets, such that the
information is considered “disseminated”); and
– There has been a reasonable waiting period for investors and the market to react to the
posted information.
The SEC’s interpretive release provides a nonexclusive list of factors for companies to consider
in evaluating the first two elements of the analysis. Determination of whether there has been a
reasonable waiting period (the third element) depends on the particular facts and circumstances
of the dissemination and varies by company. The guidance sets forth factors that may be relevant
to this evaluation.

Regulation FD 4-41
Evaluating Whether Website is a “Recognized Channel of Distribution”
In Section II.A.1 of the interpretative release, the SEC sets forth a nonexclusive list of factors
for companies to consider in evaluating whether their company’s website is a recognized
channel of distribution:
– Whether and how companies let investors and the markets know that the company has a
web site and that they should look at the company’s web site for information. For example,
does the company include disclosure in its periodic reports (and in its press releases) of its
web site address and of the fact that it routinely posts important information on its web site?
– Whether the company has made investors and the markets aware that it will post important
information on its web site, and whether it has a pattern or practice of posting such
information on its web site;
– Whether the company’s web site is designed to lead investors and the market efficiently to
information about the company, including information specifically addressed to investors,
whether the information is prominently disclosed on the web site in the location known and
routinely used for such disclosures, and whether the information is presented in a format
readily accessible to the general public;
– The extent to which information posted on the web site is regularly picked up by the market
and readily available media, and reported in, such media or the extent to which the company
has advised newswires or the media about such information and the size and market
following of the company involved. For example, in evaluating accessibility to the posted
information, companies that are well-followed by the market and the media may know
that the market and the media will pick up and further distribute the disclosures they make
on their web sites. On the other hand, companies with less of a market following, which
may include many companies with smaller market capitalizations, may need to take more
affirmative steps so that investors and others know that information is or has been posted
on the company’s web site and that they should look at the company web site for current
information about the company;
– The steps the company has taken to make its web site and the information accessible,
including the use of “push” technology, such as RSS feeds, or releases through other
distribution channels either to widely distribute such information or advise the market of its
availability. The SEC further stated that it does not believe, however, that it is necessary that
push technology be used in order for the information to be disseminated, although that may
be one factor to consider in evaluating the accessibility to the information (The SEC noted
in footnote 52 of the interpretive guidance that companies should consider the ability of
their Internet infrastructure to accommodate sharp increases in traffic associated with major
company developments.);
– Whether the company keeps its web site current and accurate;

– Whether the company uses other methods in addition to its web site posting to disseminate
the information and whether and to what extent those other methods are the predominant
methods the company uses to disseminate information; and
– The nature of the information.
Evaluating Whether Website “Dissemination” is Adequate
In Section II.A.1 of the SEC’s interpretive release, the SEC indicated that the appropriate approach
to analyzing whether and when the posting of the information disseminates it in a manner making
it available to the securities marketplace in general should be to focus on (1) the manner in which
information is posted and (2) the timely and ready accessibility of the information to investors and
the markets.
Companies are instructed to consider the same nonexclusive list of factors provided in relation to
their evaluation of whether their company website is a recognized channel of distribution (as set
forth above) for purposes of evaluating whether the company information on the company website
is “posted and accessible” and therefore “disseminated.”
As technology & website practices evolve, companies should continue to conduct this analysis.
For example—if a website slows with heavy traffic or news isn’t prominently posted, institutional
investors may be able to use machine-readable data services to access & trade more quickly than
retail investors—which might call into question whether the information is “disseminated.”
Reasonableness of Waiting Period Is Facts & Circumstances-Specific
Determination of whether there has been a reasonable waiting period for investors and the
market to react to the posted information depends on the particular facts and circumstances of the
dissemination and varies by company. Section II.A.1 of the SEC’s interpretive release sets forth
a non-exclusive list of factors that may be relevant to this facts and circumstances evaluation,
including:
– Size and market following of the company;

– Extent to which investor oriented information on the company web site is regularly
accessed;
– Steps the company has taken to make investors and the market aware that it uses its
company web site as a key source of important information about the company, including
the location of the posted information;
– Whether the company has taken steps to actively disseminate the information or the
availability of the information posted on the web site, including using other channels of
distribution of information; and
– Nature and complexity of the information.

Regulation FD 4-43
For the nature and complexity of the information, footnote 53 of the interpretive release cites SEC
v. Texas Gulf Sulphur (401 F.2d 833, 854 (2d Cir. 1968)) to illustrate that where information is of
the type that requires some time for investors to fully understand, insiders can’t take advantage of
their advance opportunity to evaluate the information by acting on it immediately.
The SEC emphasized the facts and circumstances nature of the determination, noting that a
reasonable waiting period for one company may not be reasonable for other companies or other
types of information. By way of example, the SEC indicated that a large company that “frequently
uses its website as a key resource for providing information, has taken steps to make investors and
the market aware of this, and reasonably believes that its web site is well-followed by investors and
other market participants, may get comfortable with a waiting period that is shorter than a waiting
period for a company that is not in the same situation.”
Evaluating Whether Social Media Disclosures Are “Public”
In April 2013, the SEC issued a Section 21(a) Report of Investigation providing guidance on the
application of Regulation FD to disclosures made through social media (Rel. No. 69279). In the
report, the SEC clarifies that the principles outlined in its 2008 interpretive guidance on the use
of corporate websites—which addresses when information posted on a company website may be
considered “public” for purposes of Regulation FD—apply equally to disclosures made via social
media.
According to the 2008 guidance, a company makes “public” disclosure when it distributes
information “through a recognized channel of distribution.” As applied to social media, whether a
company’s social media channel is a “recognized channel of distribution” will depend on the steps
the company has taken to alert the market to its social media channel and its disclosure practices—
as well as the use by investors and the market of the company’s social media channel.
The report emphasizes the SEC’s expectation that companies will “examine rigorously” the non-
exhaustive list of factors included in the 2008 guidance to evaluate whether a particular social
media channel is a “recognized channel of distribution” for communicating with their investors.
As with website disclosure, this requires companies to conduct a thorough facts and circumstances
analysis before being in a position to conclude that disclosures made via a social media channel
will be “public” for Regulation FD purposes.
d. Permitted & Prohibited Communications
Reg FD Prohibits Selective Disclosure to Market Participants
Selective disclosure occurs when companies provide material nonpublic information to one or
more of the enumerated securities market participants via, e.g., one-on-one meetings or telephone
discussions, investor conferences, analyst conference calls with limited participation—and not to
the general public. Pursuant to Rule 100(b)(1), Regulation FD applies only to communications with

four categories of individuals the SEC deemed would be reasonably expected to trade securities on
the basis of the information or provide others with advice about securities trading.
Subject to the specific exclusions set forth in the rule, the four categories are:
– Broker-dealers and their associated persons;
– Investment advisers, certain institutional investment managers and their associated persons;
– Investment companies, hedge funds, and affiliated persons; and
– Holders of the company’s securities, under circumstances in which it is reasonably

foreseeable that such persons will buy or sell securities on the basis of the information.
Certain Types of Selective Disclosures Expressly Excluded
According to Rule 100(b)(2), Regulation FD expressly does not apply to these three categories of
disclosures:
– Disclosures to persons who owe a duty of trust or confidence to the company, i.e.,
temporary insiders such as attorneys, accountants, or investment bankers;
– Disclosures to persons who expressly agree to maintain the disclosed information in

confidence; and
– Communications made in connection with registered securities offerings, subject to limited

exceptions.
The SEC noted that the first two exclusions recognize that companies may properly share material
nonpublic information with outsiders for legitimate business purposes when the outsiders are subject
to duties of confidentiality, and that the information may be shared with individuals or groups that
owe a duty of trust or confidence or who are subject to a confidentiality agreement within a larger
organization that itself does not owe such a duty and is not subject to a confidentiality agreement. In
those instances, disclosure is permitted only to the individuals or groups that owe a duty of trust or
confidence or who are subject to a confidentiality agreement, and not others within the organization.
Companies can disclose information to their own employees without violating Regulation FD
because, pursuant to Rule 100(b)(1), employees are not persons “outside the issuer.”
“Investment Advisers” Are Covered Recipients of Information
Most types of investment advisers are subject to Regulation FD. Rule 100(b)(1)(ii) defines
investment adviser with reference to the definition set forth in Section 202(a)(11) of the Investment
Advisers Act of 1940 as follows:

Regulation FD 4-45
“Investment adviser” means any person who, for compensation, engages in the business of advising
others, either directly or through publications or writings, as to the value of securities or as to the
advisability of investing in, purchasing, or selling securities, or who, for compensation and as part of a
regular business, issues or promulgates analyses or reports concerning securities; but does not include:
A. a bank, or any bank holding company as defined in the Bank Holding Company Act of 1956,
which is not an investment company, except that the term “investment adviser” includes any bank
or bank holding company to the extent that such bank or bank holding company serves or acts
as an investment adviser to a registered investment company, but if, in the case of a bank, such
services or actions are performed through a separately identifiable department or division, the
department or division, and not the bank itself, shall be deemed to be the investment adviser;
B. any lawyer, accountant, engineer, or teacher whose performance of such services is solely
incidental to the practice of his profession;
C. any broker or dealer whose performance of such services is solely incidental to the conduct
of his business as a broker or dealer and who receives no special compensation therefor;
D. the publisher of any bona fide newspaper, news magazine or business or financial publication
of general and regular circulation;
E. any person whose advice, analyses, or reports relate to no securities other than securities
which are direct obligations of or obligations guaranteed as to principal or interest by the
United States, or securities issued or guaranteed by corporations in which the United States has
a direct or indirect interest which shall have been designated by the Secretary of the Treasury,
pursuant to Section 3(a)(12) of the Securities Exchange Act of 1934, as exempted securities for
the purposes of that Act;
F. any nationally recognized statistical rating organization, as that term is defined in Section
3(a)(62) of the Securities Exchange Act of 1934, unless such organization engages in issuing
recommendations as to purchasing, selling, or holding securities or in managing assets,
consisting in whole or in part of securities, on behalf of others; or
G. such other persons not within the intent of this paragraph, as the Commission may designate
by rules and regulations or order.
See, for example, SEC v. Presstek & Marino, Litig. Rel. No. 21443 (March 9, 2010), where the
SEC charged Presstek and its former CEO with violating Regulation FD based on the CEO’s
selective disclosure of material non-public information about the company’s quarterly financial
performance to a managing partner of a registered investment adviser. Within minutes of receiving
that information, the managing partner sold all of the shares of Presstek stock managed by the
investment adviser.
Keep in mind that entities excluded from the definition of “investment adviser” may still be
subject to Regulation FD in their capacity as “institutional investment managers,” which are
defined relative to Exchange Act Section 13(f)(6), or persons associated with the investment

adviser or institutional investment manager (i.e., any partner, officer, or director of the investment
adviser or institutional investment manager (or any person performing similar functions), or any
person directly or indirectly controlling or controlled by such investment adviser or institutional
investment manager, including any employee of such investment adviser).
Security Holders Are Covered Recipients of Information
Absent a specified exclusion, Regulation FD (Rule 100(b)(1)) applies to covered disclosures made
by or on behalf of the company to the company’s security holders under those circumstances in
which it is reasonably foreseeable that the security holder will purchase or sell the company’s
securities on the basis of the information.
To establish a Regulation FD violation, the SEC must show that “under the circumstances” it was
reasonably foreseeable that the persons would buy or sell the company’s securities on the basis of
the privately disclosed information. This is a facts and circumstances test.
See, for example, the SEC’s Cease-and-Desist Order in the Fifth Third Bancorp case (Release No.
65808; November 22, 2011), where the SEC found Fifth Third violated Regulation FD based on
its selective disclosure to certain investors that it would be redeeming a class of its trust preferred
securities for about $25/share. At the time, the securities were trading for about $26.50/share. Fifth
Third didn’t issue a Form 8-K or other public notice of the redemption until it became aware that
investors who appeared to have learned of the redemption had been selling the securities to buyers
who appeared to be unaware of the redemption. It failed to consider how its decision to redeem the
securities would affect investors in the market for those securities.
Outside of ordinary course communications with third parties such as customers, suppliers,
strategic partners and government regulators who also happen to be security holders of the
company, it is risky for a company to assume that a security holder will not trade on the basis of
privately disclosed material information unless a company can obtain some evidentiary support for
its belief.
Rule 100(b)(1)(iv) of Regulation FD sets forth the “reasonable foreseeability” standard. In

footnote 27 of the Regulation FD adopting release, the SEC noted that companies ordinarily could
presume that customers, suppliers, strategic partners, journalists or regulators who are securities
holders would not trade on the basis of the information provided, in part due to the risk of liability
under the misappropriation theory of insider trading. Learn more in our “Insider Trading Policies
Chapter.”
Qualified Institutional Buyers or Institutional Accredited Investors are Covered Recipients
Companies subject to Regulation FD need to consider whether any information contained in a “test-
the-waters” communication would trigger a public disclosure under Regulation FD—the mere fact
that a company is considering a public offering could itself be material nonpublic information.

Regulation FD 4-47
Unless the recipients of the “test-the-waters” communication, which are investors that are—or
are reasonably believed to be—qualified institutional buyers or institutional accredited investors,
expressly agree to maintain the information in confidence or otherwise owe a duty of trust or
confidentiality to the company, a test-the-waters communication may trigger Regulation FD
disclosure if it selectively shares material nonpublic information with certain shareholders or
securities market professionals.
Venture Capitalists Are Covered Recipients
Venture capitalists typically have access to material nonpublic information from their portfolio
companies because they have large ownership stakes and board memberships. Even though venture
capitalists often are exempt from registering as an investment company and communications to
them are not covered by Regulation FD in this particular capacity (i.e., as an investment company),
communications to them are covered by Regulation FD as holders of the securities because it is
unlikely that a company could have a reasonable belief that a venture capitalist would not trade
in the company’s securities on the basis of the information, which is the test applicable under
Regulation FD for determining whether particular security holders are covered.
Under Regulation FD, companies may selectively disclose material nonpublic information to
venture capitalists in their capacity as security holders provided that the information is shared
pursuant to an express confidentiality agreement obtained in advance of the disclosure, or even
after the fact provided that the recipient has not disclosed the information or traded the company’s
securities prior to agreeing to maintain the information in confidence.
Communication of Material Nonpublic Information to Employees Permitted
By its terms, Regulation FD applies to disclosures made to persons outside the issuer and within
specifically enumerated categories of securities market participants. Therefore, companies may
disclose material nonpublic information to their own employees (who also are subject to duties of
trust and confidence) without violating Regulation FD, even if these employees are shareholders.
In Regulation FD CDI 101.09, the SEC Staff emphasized that Rule 100(b)(1) applies only to
disclosures made to “any person outside the issuer.”
Communication of Material Nonpublic Information to Investment Bankers Permitted
Regulation FD does not prohibit companies from privately disclosing confidential information to their
investment bankers. Information can be provided privately to investment bankers because Regulation
FD specifically excludes communications to them as temporary insiders under Rule 100(b)(2)(i). In
addition, investment bankers typically agree to keep the information confidential, which excludes the
communications from coverage under Regulation FD pursuant to Rule 100(b)(2)(ii).
Challenges to this general rule can arise when different employees of an investment banking firm
serve a company in different capacities, such as an investment banker and an analyst. Although
Regulation FD does not affect the ability of companies to share confidential information with the

investment banking side of a firm, companies should be careful not to share this information with
the analyst research side. In footnote 29 of the Regulation FD adopting release, the SEC expressly
acknowledged that if a company provides information to its investment banker pursuant to one of
the enumerated exclusions, it will not be deemed to be providing the information to the bank’s sell-
side analysts or other parts of the investment banking firm.
Ordinary Course Business Communications with Customers, Suppliers Permitted
In Sections II.A.4 and II.B.1.a of the Regulation FD adopting release, the SEC discussed the fact
that it had deliberately narrowed the scope of coverage of Regulation FD to the types of persons
most likely to be the recipients of improper selective disclosure to avoid interfering with ordinary-
course business communications and disclosures to the media.
In footnote 27 of the Regulation FD adopting release, the SEC specifically noted that while it
is conceivable that a company’s customers, suppliers, strategic partners, news organization or
government agency could be security holders, it ordinarily would not be foreseeable for the
company engaged in ordinary-course business-related communications with those persons to expect
the persons to trade the company’s securities on the basis of those communications, in part due to
their risk of liability for insider trading (under the misappropriation theory) if such persons were
to trade on the basis of material non-public information obtained in their representative capacity.
Learn more in our “Insider Trading Policies Chapter.”
However, this presumption pertains only to ordinary-course business-related communications with

these individuals. If there is any concern that a communication does not fall into that category, and
the information is material and nonpublic, a company should protect itself by having the recipient
of the information enter into a confidentiality agreement that comports with the requirements of
Regulation FD. Even if it’s not required for Regulation FD reasons, it’s a good practice to get a
confidentiality agreement before sharing material non-public information.
Ordinary Course Communications with Independent Contractors Permitted
A company ordinarily may disclose material non-public information to its independent contractors
(who may also be shareholders) without making public disclosure of the information. Regulation
FD applies only to disclosures made to the categories of persons outside the issuer enumerated in
Rule 100(b)(1)—i.e., those characterized as securities market professionals, and investors in those
circumstances where it is reasonably foreseeable that they will trade on the basis of the information.
However, this presumption pertains only to ordinary-course business-related communications

with these individuals. The SEC noted in footnote 27 of the Regulation FD adopting release that
while it is conceivable that a representative of, e.g., a customer, supplier or strategic partner,
could also be a shareholder, it ordinarily would not be foreseeable for the company engaged in an
ordinary course business-related communication with that person to expect the person to trade the
company’s securities on the basis of the communication. If a communication does not fall into that
category and is material and nonpublic, a company should protect itself by having the recipient

Regulation FD 4-49
of the information enter into a confidentiality agreement that comports with the requirements of
Regulation FD.
Responding to Congressional Office Requests Permitted, Consider Steps to Protect

Confidentiality
Under the STOCK Act, Congressional personnel owe duties of trust and confidence with respect
to information they receive in their official capacity. Since that’s the case, we think companies can
draw some comfort from the language of footnote 27 to the Regulation FD adopting release, which
says that even though it is conceivable that a governmental representative might be a stockholder,
it ordinarily would not be foreseeable for the issuer engaged in an ordinary-course business-
related communication to expect that person to buy or sell securities based on that information.
In that regard, the footnote observes that someone who did trade under those circumstances could
themselves face liability for insider trading under the misappropriation theory.
Unfortunately, Congress holds most of the leverage here, but this excerpt from this Marten law firm
memo provides some recommendations on protecting confidentiality:
“Without appearing to be hostile to the committee’s request, oversight counsel

should certainly flag confidentiality as an impediment to voluntary production.
The information asymmetries involved—e.g., committee staff will not be able
independently to verify that a responding company’s assessment of the harm likely
to be incurred by disclosure is reasonable—may prevent success, but companies
are nevertheless well-advised to seek three accommodations as a condition of
disclosure:
– That committee staff commit in writing not to release designated

confidential materials outside of the committee without a compelling
legislative justification not achievable by less burdensome means;
– That staff allow the responding company to affix durable watermarks

on all such documents to designate them as subject to this
understanding; and,
– If the committee nevertheless feels compelled to publicize the

material further, that staff provide notification no less than 72 hours
in advance.
It also worth arguing for some or all of these accommodations even where a
subpoena is at issue since none are legally binding in any case.”
Communications with Certain Proxy Advisors Subject to Reg FD
Certain proxy advisory firms such as ISS—which issues recommendations regarding how its
investor clients should vote or, in some cases, is authorized to vote its clients’ shares—are also

registered as investment advisors with the SEC. Investment advisers are one of the enumerated
categories of persons covered under Rule 100(b)(1) of Regulation FD.
Therefore, disclosures of material nonpublic information to ISS are subject to Regulation

FD. However, to the extent information disclosed is material (which is often not the case for
information communicated in these circumstances), such communications typically are (or should
be) made on a confidential basis—thus qualifying for the exclusion to coverage set forth in Rule
100(b)(2)(ii).
Glass Lewis, another major proxy advisory firm, is not a registered investment advisor. However,
given its scope of services and activities (which are fairly comparable to ISS)—like ISS—we
would advise that material nonpublic information be shared with them only on a confidential basis.
Private Communications with Analysts About Earnings is High-Risk
A company should assume that it cannot discuss earnings information (e.g., reports or projections/
forecasts) privately with analysts and other securities market participants without the earnings
information being considered “material” and the private communications thus constituting a
violation of Regulation FD absent application of one of the exclusions set forth in the rule. In fact,
Regulation FD was enacted primarily to stop this practice. In Section II.B.2 of the Regulation FD
adopting release, the SEC came close to stating that discussions with analysts regarding earnings are
always material by stating, “When an issuer official engages in a private discussion with an analyst
who is seeking guidance about earnings estimates, he or she takes on a high degree of risk under
Regulation FD.”
A person authorized to speak for a company likely violates Regulation FD if they privately inform
an analyst that anticipated earnings will be higher, lower, or even the same as predicted, regardless of
whether the information is conveyed explicitly or implicitly (e.g., obvious body language or speaking
in “code”). The SEC has demonstrated that it will not hesitate to bring actions against companies that
privately correct publicly disclosed information by speaking directly to analysts or by urging analysts
to correct their projections. The only recognized “safe” exception is a private reaffirmation that the
company believes its estimates are the same just after a public statement to that effect.
However, this exception does not mean that a company can use subsequent selective
communications to clarify or correct prior public disclosures that the company realizes may have
been misunderstood or perceived in a manner other than as intended. See, for example, the SEC’s
Report of Investigation in the Motorola case (Report of Investigation Pursuant to Section 21(a)
of the Securities Exchange Act of 1934: Motorola, Release No. 34-46898 (Nov. 25, 2002)), where
the SEC stated that “[a]fter-the-fact private communications of material, nonpublic information to
securities professionals are not a proper way to supplement a prior public disclosure that the issuer
determines to have been misunderstood or misinterpreted.”
The SEC can bring actions under Regulation FD even when companies provide implied or indirect
earnings guidance—i.e., speak in “code” or use body language (including tone, emphasis, and

Regulation FD 4-51
demeanor) to communicate. “Code” is slang or language for which both management and the
analyst understand the true meaning of the words.
See, for example, the SEC’s Cease-and-Desist Order in the Office Depot case (Release No. 3198;
October 21, 2010), where the SEC found Office Depot violated Regulation FD based on its
selective communications to analysts that it wouldn’t meet their quarterly earnings estimates. After
a discussion between the CEO and CFO, the company conducted one-on-one calls with analysts
late in the quarter. It didn’t directly tell the analysts that it wouldn’t meet their expectations.
Rather, this message was signaled through its references to recent public statements of comparable
companies about the impact of the slowing economy on their earnings, and reminders of the
company’s prior cautionary public statements. The analysts promptly lowered their estimates for
the period.
In Motorola, Release No. 34-46898 (Nov. 25, 2002), the SEC stated, “What is particularly
troubling about this case is that Motorola communicated to the public using general terms such
as “significant,” and then engaged in private discussions with analysts to provide a more detailed
quantitative definition of the code word “significant.”
See also SEC v. Schering-Plough, Litig. Rel. No. 18330 (Sept. 9, 2003) (emphasizing reactions of
analysts and investors to the “combination of spoken language, tone, emphasis, and demeanor” the
CEO displayed in private meetings that had the effect of disclosing “negative and material, nonpublic
information regarding Schering’s earnings prospects, including that analysts’ earnings estimates for
Schering’s 2002 third-quarter were too high, and that Schering’s earnings in 2003 would significantly
decline”).
Note that although private plaintiffs cannot rely on violations of Regulation FD as a basis for a
private action, Regulation FD does not affect any existing grounds for private liability under Rule
10b-5, so a selective disclosure may provide a basis for a private action on those grounds. (In
Section II.B.7 of the Regulation FD adopting release, the SEC made clear that only its Staff can
bring actions for a violation of Regulation FD, and Rule 102 of Regulation FD excludes Rule 10b-5
liability if a case is based solely on selective disclosure.)
Private Communications with Analysts Still Permitted in Certain Circumstances
Companies can speak privately with securities analysts without triggering a Regulation FD selective
disclosure violation provided the information communicated is not material or the analysts expressly
agree to maintain the confidentiality of that information until it is publicly disclosed by the company
(thus falling within the express exclusion to Regulation FD pursuant to Rule 100(b)(2)(ii)).
As the SEC discussed in Section II.B.2 of the Regulation FD adopting release, companies can
disclose non-material information to analysts even if the information happens to be the last piece
in a puzzle such that the analyst comprehends a material development for the company. The SEC
acknowledged that analysts may discern the significance of otherwise immaterial information in
cases where the reasonable investor would not. Appropriate topics for discussion with analysts may
include historical information about the company to illustrate trends in the business or the industry

in general, immaterial background information (e.g., management team experience in the industry),
and the company’s strategy, goals and management philosophy and other previously publicly
disclosed information.
However, the SEC made clear that company officials assume a high degree of risk under Regulation
FD when engaging in private discussions with analysts seeking guidance about earnings estimates,
whether the earnings information is communicated expressly or indirectly or implicitly. Further,
deliberately communicating pieces of non-material information that comprise the material whole
will not avoid a Regulation FD violation. Other types of material information or events the SEC
has identified as warranting careful review for materiality (as well as other material information or
events, in that the SEC’s list is not intended to be exhaustive) should be viewed in a similar fashion.
Companies can try to protect themselves by making broad disclosure of topics that they anticipate
analysts will ask about in private, even if the public disclosure is not at the level of detail discussed
with analysts. As long as these details are not material in themselves, companies can relatively safely
“drill down” into these publicly disclosed areas during private conversations under the mosaic theory.
Practices for Private Communications with Analysts

Although each company has its own culture and circumstances that need to be considered, the
following practices should be considered in conducting private conversations with analysts:
– Only hold conversations regarding financial matters shortly after issuing an earnings release
when all material information about the company should be available to the market;
– Avoid conversations regarding financial matters during the company’s black-out or quiet periods;
– Inform the analyst of the ground rules up front, listing those topics that are “off limits” and
sharing the material features of the company’s external communication policy;
– Ensure that all company spokespersons are knowledgeable about the company’s business
so that the information provided is materially accurate and complete and consistent with
the company’s prior public disclosures and its guidelines on areas that are “off limits” for
discussion;
– Explore ways to publicly disclose information that the company wants to freely discuss in
private meetings, such as adding more detailed financial information to earnings releases or SEC
reports;
– Try to have another designated spokesperson or an investor relations professional (if same
is not a designated spokesperson) present who can help prevent disclosure of material non-
public information or correct inadvertent errors that the company spokesperson may make;
and
– Avoid unplanned private conversations that can more easily lead to inadvertent disclosure of
material non-public information.

Regulation FD 4-53
Before engaging in any one-on-one meetings with analysts, companies should consider taking the
following steps: (1) thoroughly review what has been disclosed previously; (2) review potential
questions and the law of materiality; and (3) determine questions that may or may not be answered.
Moreover, companies should be prepared to state which areas will not be discussed due to the fact
that such subject matters have not yet been previously disclosed.
Limited Access Settings Don’t Satisfy Public Disclosure Requirement
The following settings may have numerous participants but, absent other methods of disclosure
reasonably designed to provide broad, non-exclusionary distribution of the information to the
public, would not satisfy Regulation FD’s public or public disclosure requirements:
– Shareholder meetings that are not webcast or broadcast by electronic means such that
disclosure is reasonably designed to provide broad, non-exclusionary distribution of the
information to the public
– Investor conferences hosted by investment banks
– Company-sponsored open houses or analyst days
– Online interview and chat sessions involving senior officers
Material disclosures made in these settings ordinarily would be deemed selective and thus subject
to Regulation FD’s public disclosure requirements.
Guidelines for Presentations in Limited Access Settings
Companies should consider steps such as the following to avoid the potential for Regulation FD
violations in limited access settings:
– Minimize informal conversations with meeting participants before and after the planned
presentation
– Ask the sponsor to implement procedures so that the presentation is not a limited access
setting (e.g., webcast preceded by adequate advance notice)
– Issue a press release or file a Form 8-K before a meeting is held that contains the material
nonpublic information expected to be disclosed
– Before the presentation starts, publicly furnish any presentation handouts or slides
– Have counsel and other members of the communication team preview any presentation
materials or scripts before meeting
– Make the presentation on the basis of a prepared script or outline

– Require that at least two company employees be present so that they can confer and
collaborate on what transpired in case there are questions about whether there were
non‑intentional selective disclosures
– Record the presentation, including the question and answer session, and have the investor
relations officer or other qualified employee or agent review the record to ensure that
material nonpublic information wasn’t inadvertently disclosed
– Familiarize oneself and have available for reference recent or otherwise relevant press
releases, SEC filings and Regulation FD-compliant transcripts to affirm or determine if
particular information has previously been made public
Disclosure at Shareholder Meetings Typically Doesn’t Satisfy Reg FD
In Regulation FD CDI 102.05, the SEC Staff made clear that a company can provide material
information at its shareholders meeting in compliance with Regulation FD’s public disclosure
requirement only if the meeting is webcast or broadcast by electronic means such that disclosure
is reasonably designed to provide broad, non-exclusionary distribution of the information to the
public in accordance with Rule 101(e)(2) of Regulation FD. It is not sufficient that the meeting
merely be open to the public.
The following survey results address 2013 annual shareholder meeting practices for over 300
company respondents:
– Provided Internet audiocast of the physical meeting—14.1%
– Provided live webcast with slides—10.6%
– Provided live webcast (view actual proceedings and listen real time):—5.0%
– Held virtual annual meeting (view, listen, vote and ask questions real time): 1.6%
– Did not make their meeting available through the Internet in any form—72.0%
Compared to a similar survey of 150 companies in 2011, live webcasting and audiocasting each
increased by approximately 5%. Virtual meetings have spiked in popularity since the Covid-19
pandemic—for instance, Broadridge hosted 1,957 virtual meetings in 2020, and 95% allowed live
questions to be submitted.
Consider Posting Transcript for Disclosure at Virtual Shareholder Meeting, Even for Reg FD
Compliant Meetings
In 2020, many companies held virtual annual shareholder meetings due to social distancing
requirements as a result of the COVID-19 pandemic. Assuming that the virtual annual meeting is
Regulation FD compliant—everyone is allowed to listen in, and the company has provided advance
notice informing the public that they may participate through a combination of a press release,

Regulation FD 4-55
website disclosure and a SEC filing, there’s no specific requirement for a transcript to be posted, but
it is clearly a best practice when it comes to earnings calls and other management presentations. In
the event an executive inadvertently discloses material, non-public information, the company may
want to consider posting a transcript of the meeting. Most annual meetings have not been structured
to comply with Regulation FD in the past, and there isn’t extensive precedent when it comes to
posting transcripts. Since that’s the case, we recommend companies post a transcript and keep it up
for as long as they customarily keep earnings releases posted.
If the virtual meeting is not Regulation FD compliant and an executive inadvertently spills the
beans on material non-public information during the meeting, you will have to promptly disclose
the information in a Regulation FD compliant manner (press release, Form 8-K, etc.).
Prepare to React to Private Analyst Communications After the Fact
Companies should develop and implement policies and procedures governing their communications
with analysts (as well as other covered securities market participants) that include identification
of authorized spokespersons and protocol relative to such communications to prevent selective
disclosure of material nonpublic information during these communications. Such policies and
procedures should also address the potential for non-intentional selective disclosures and the means
for assessing materiality and determining whether prompt public disclosure of such information is
required under Regulation FD.
A process should be pre-established to quickly respond to non-intentional, potentially material

selective disclosures for Regulation FD purposes. To make the determination timely, ideally, a
company should consider having a “SWAT” team—which may be its disclosure team—that makes
a recommendation to someone responsible for the ultimate decision (normally an authorized
spokesperson in conjunction with inside and/or outside counsel). If the company discovers that
selective disclosure of material non-public information was improperly provided to an analyst or
other securities market participant covered by Regulation FD, the company should promptly make
the information publicly available by broadly disseminating the information in conformance with
Regulation FD’s requirements.
Note also that, as the SEC discussed in footnote 28 of the Regulation FD adopting release, express
confidentiality agreements may be obtained from recipients of material information after a selective
disclosure has been made to address an inadvertent selective disclosure, provided that the recipients
have not disclosed the information or traded the company’s securities prior to agreeing to maintain
the information in confidence.
Confidentiality Agreements Don’t Need To Be In Writing
Under Rule 100(b)(2)(ii), Regulation FD excludes from coverage communications made to any
person who expressly agrees to maintain the information in confidence. Although the agreement
to maintain confidentiality must be express, it does not need to be in writing. The SEC specifically
indicated in footnote 28 of the Regulation FD adopting release that an oral agreement is sufficient.

The SEC’s assurances notwithstanding, whenever feasible and appropriate, a written agreement
obtained in advance of disclosure is preferable. A company is better able to prove that another party
agreed to keep the information confidential if the agreement is in writing. In addition, a written
agreement obtained in advance can better define and ensure that there is a meeting of the minds
regarding the scope of permitted uses of the information, which reduces the likelihood of subsequent
disputes.
On the other hand, there are certain instances (e.g., in the context of preliminary merger
discussions) where material nonpublic information is often exchanged before written confidentiality
agreements are executed. In those instances, the ability to use oral express agreements under
Regulation FD is important to avoid triggering a duty to publicly disclose information prematurely.
Confidentiality Agreements Must Be Express
Pursuant to Rule 100(b)(2)(ii), Regulation FD does not apply to disclosures made to persons who
expressly agree to maintain the information in confidence. In the absence of SEC guidance on the
meaning of “express,” we look to common law contract principles. Under common law, the clarity
of expression is important in determining whether there was an agreement. In theory, an expression
can be accomplished through the language, conduct, and intent of the parties. The agreement,
however achieved, should clearly and affirmatively indicate a meeting of the minds.
Companies can interact with institutional investors without running afoul of Regulation FD when,
for example, the company wants to gauge a response to a new idea. If doing so, it’s important
to remember that Regulation FD permits companies to disclose information to investors and
other persons covered by the rule “who expressly agree to maintain the disclosed information in
confidence.” Not all investors will agree to maintain confidentiality and some who do often will
require a commitment to public disclosure after a relatively short period.
Confidentiality Agreements Typically Used for “Test-the-Waters” Communications
Companies subject to Regulation FD that want to engage in “test-the-waters” communications

typically follow wall-cross procedures in connection with the communication, including obtaining a
confidentiality agreement and carefully limiting the communications to select investors.
Confidentiality Agreements Don’t Need to Prohibit Trading
A person agreeing to keep information confidential does not need to agree to refrain from trading
on that information in order to have an effective confidentiality agreement under Rule 100(b)(2)(ii)
of Regulation FD.
The SEC addressed this in Regulation FD CDI 101.05, where it indicated that the confidentiality
agreement need not contain an agreement not to trade on the information in order to rely on the
exclusion set forth in Rule 100(b)(2)(ii); the express agreement to maintain the information in
confidence is sufficient. The SEC also noted, however, that if the recipient of the material nonpublic

Regulation FD 4-57
information subject to such a confidentiality agreement trades or advises others to trade, the
recipient could face insider trading liability. Learn more in our “Insider Trading Policies Chapter.”
Confidentiality Agreement May Be Obtained After Selective Disclosure Under Certain

Circumstances
expressly agree to maintain the information in confidence. However, the agreement does not need
to be obtained before the communication is made.
The SEC specifically indicated in footnote 28 of the Regulation FD adopting release that the
agreement may be obtained after the disclosure is made, but before the recipient discloses or
trades on the basis of the information. In fact, in that same footnote, the SEC made clear that
express confidentiality agreements may be obtained from recipients of information after a
selective disclosure has been made to try to avoid any harm resulting from an inadvertent selective
disclosure.
The SEC’s assurances notwithstanding, whenever feasible, a written agreement obtained in advance
of disclosure is preferable. A written agreement obtained in advance can better define and ensure
that there is a meeting of the minds regarding the scope of permitted uses of the information, which
reduces the potential for subsequent disputes.
Agreement to Not Violate Federal Securities Laws Insufficient for Confidentiality Agreement
expressly agree to maintain the information in confidence. However, merely agreeing to not violate
the federal securities laws is not adequate for this purpose.
In Regulation FD CDI 101.06, the SEC Staff made clear that an acknowledgment from the recipient
of the information not to use the information in violation of the federal securities laws would not be
sufficient, and that the recipient must expressly agree to keep the information confidential in order
to rely on the Rule 100(b)(2)(ii) exclusion.
Disclosure of Material Nonpublic Information Under Embargo Permitted
A company can embargo information by providing the material nonpublic information to a recipient
who agrees not to disclose the information until broad non-exclusionary distribution is made or
until a pre-established point in time.
An “embargo” is a type of confidentiality agreement. During the period of the embargo, the
recipient of the information owes a duty of trust and confidence to the company and can be
considered a temporary insider of the company.

May Use Embargo Agreements with Analysts Before Merger Announced
Companies can tell analysts about an upcoming merger before it is publicly announced only if
the analysts expressly agree to maintain the confidentiality of that information until it is publicly
disclosed by the company.
In some circumstances, a company may want to inform analysts that regularly cover the company
about an upcoming transaction to allow them to evaluate it before it is publicly disclosed. This
enables the analysts to more accurately and comprehensively publish research and advise investors
immediately following the company’s public announcement about the transaction.
The SEC noted in footnote 44 of the Regulation FD adopting release that time-limited embargo
agreements with analysts are permissible and may be beneficial to companies’ interests in
appropriate circumstances. This is so even though they arguably give the analysts an advantage
over competitors because the analysts have time to evaluate the information and will be able to
provide financial advice to their clients (and execute trades for clients) more quickly after the
information is publicly released.
Companies should attempt to get this express confidentiality agreement in writing due to the
unquestionable materiality of the information, and should also limit the duration of an embargo to a
short period of time (e.g., several hours, ideally) before the public announcement to reduce the risk
of information leaks and the potential for changed circumstances (e.g., if negotiations don’t proceed
as planned and an anticipated transaction is not consummated), and to mitigate the analysts’
potential for liability as “temporary insiders” under Rule 10b-5 for trading prior to the time the
information has been disseminated to and absorbed by the marketplace.
Disclosure to Merger Partners Before Transaction Subject to Reg FD
Regulation FD does not prohibit companies from privately disclosing material nonpublic
information to potential merger partners if the potential partner expressly agrees to keep the
information confidential. Companies may want to review their standard forms of confidentiality
agreements for purposes of ensuring that the agreements provide that the potential partner
acknowledges and represents that Regulation FD is one of several reasons that the information must
be kept in confidence.
Even though communications relating to Regulation M-A transactions are not subject to Regulation
FD, this exception is not available until the commencement of the transaction, which is defined as
the first public announcement of the transaction. In other words, companies still need to cover their
communications by an express agreement of confidentiality before the public announcement of a
merger for Regulation FD purposes.
Use of Press Ordinarily Not Sufficient to Comply with Reg FD

This excerpt from the SEC’s adopting release in 2000 notes how Regulation FD doesn’t apply to
normal communications with journalists:

Regulation FD 4-59
Rule 100(b)(1) enumerates four categories of persons to whom selective disclosure

may not be made absent a specified exclusion. The first three are securities market
professionals—(1) broker-dealers and their associated persons, (2) investment advisers,
certain institutional investment managers and their associated persons, and (3) investment
companies, hedge funds, and affiliated persons. These categories will include sell-side
analysts, many buy-side analysts, large institutional investment managers, and other
market professionals who may be likely to trade on the basis of selectively disclosed
information. The fourth category of person included in Rule 100(b)(1) is any holder of
the issuer’s securities, under circumstances in which it is reasonably foreseeable that such
person would purchase or sell securities on the basis of the information. Thus, as a whole,
Rule 100(b)(1) will cover the types of persons most likely to be the recipients of improper
selective disclosure, but should not cover persons who are engaged in ordinary-course
business communications with the issuer, or interfere with disclosures to the media or
communications to government agencies.[FN 27]
[FN 27] While it is conceivable that a representative of a customer, supplier, strategic
partner, news organization, or government agency could be a security holder of the
issuer, it ordinarily would not be foreseeable for the issuer engaged in an ordinary-course
business-related communication with that person to expect the person to buy or sell the
issuer’s securities on the basis of the communication. Indeed, if such a person were to
trade on the basis of material nonpublic information obtained in his or her representative
capacity, the person likely would be liable under the misappropriation theory of insider
trading.
As affirmed by the SEC’s Regulation FD CDI 102.06, the mere presence of the press in a limited-
access setting does not exempt the disclosures from Regulation FD, even though the disclosures
to the press itself are not covered by Regulation FD. The key inquiry is whether the disclosure
achieves the goal of effecting broad, non-exclusionary distribution of information to the public as
While it is possible that disclosure to the press in particular circumstances may achieve this
standard of public disclosure, that is not likely in most cases. To be safe, a company should not rely
on communications to the press to satisfy Regulation FD’s public disclosure requirement unless it
knows the journalist will effect a simultaneous live public broadcast of the presentation for which
adequate advance notice to the public has been given.
Companies also should consider the risks of real time media presence. For example, if there is an
inadvertent disclosure during a presentation, it may be more detrimental to the company’s image
than had the press not been present. While companies need to react “promptly” in order to fulfill
the Regulation FD requirements for non-intentional disclosures, companies will typically benefit
from a bit of lead time and the opportunity to initiate public disclosure of the information before the
information is widely reported on mainstream cable and network broadcast channels, or potentially
even secure confidentiality agreements with the recipients of the information, to the extent feasible.

We’ve always wondered (or worried) about the journalist exception when the journalist is a conduit
for the market (e.g., the Jim Cramer & Apple flap in 2015). It’s possible that footnote 27 in the 2000
adopting release wasn’t written by the SEC to address this type of situation. For example, it may
have been written to assure company officials that communicating high demand to a supplier in an
effort to secure additional supplies would not violate Reg FD—even if the supplier is a “holder”
(which likely should have been written in the regulation as “owner”) of company securities.
The bottom line about the press is that it’s not usually a very good way to plan for Reg FD
compliance (although the live interview situation is probably not subject to the usual concerns
about what the press will actually report—and when they’ll actually report it publicly). On the
other hand, there’s nothing wrong with providing an “exclusive” to a single member of the media
for purposes of dissemination. In fact, the practice is common. If the journalist trades—or tells
others—prior to disseminating, that’s on their dime.
Selective Disclosure May Violate Reg FD, Rule 10b-5 & Exchange Rules
Selective disclosure may violate Regulation FD and Exchange Act Rule 10b-5. Insiders who
selectively disclose material nonpublic information may also be liable for insider trading. Learn
more in our “Insider Trading Policies Chapter.”
In addition, the NYSE and Nasdaq require that their listed companies promptly, broadly
disseminate information that reasonably might be expected to materially affect the market for their
securities.
Early Advisory Communications to Media Outlets—Use Embargo Agreements
In 2020, Kodak found itself subject to an SEC investigation in connection with an announcement
of a $765 million government loan to make COVID-19 pharmaceuticals at its US factories. The
company sent a news advisory to media outlets a day before its official announcement. At the
time, the WSJ reported that the company didn’t provide any embargo instructions to prevent the
press from sharing the information. The events weren’t necessarily a “leak,” given the information
was purportedly intentionally released—but at any rate, shares spiked as the news trickled out,
and arguably not everyone had access to the same information. For example, investment firm
“bots” had a big advantage as they crawled the web. Instead of immediately making its own
announcement, Kodak asked the reporters to remove their articles. However, that may have been
an incomplete solution since some stories had already been captured by screen shots, social posts
and search engines. It’s important for companies to embargo any press releases that are shared
with media outlets prior to release of a company’s official announcement. Regulation FD permits
use of time-limited embargo agreements and ideally, companies should attempt to get this express
confidentiality agreement in writing and should also limit the duration of an embargo to a short
period of time.

Regulation FD 4-61
e. Dissemination of Disclosure
Public Disclosure Can Be Made in Various Ways
To satisfy the public disclosure requirement under Regulation FD, pursuant to Rule 101(e), the
information must be disseminated via a Form 8-K or through another method or combination of
methods of disclosure reasonably designed to provide broad, non-exclusionary distribution of the
information to the public. A company can comply with this requirement in several ways:
– Furnish a Form 8-K under Item 7.01 or file a Form 8-K under Item 8.01
– Issue a press release through widely circulated news or wire services (i.e., PR Newswire,
Business Wire, Bloomberg), unless the company knows its press releases are routinely not
carried by major business wire services
– Disseminate through any other method or combination of methods reasonably designed to
provide broad non-exclusionary distribution to the public, such as press conferences or con-
ference calls that interested members of the public may attend or listen to either in person,
telephone or electronic transmission (including the Internet), provided that the public is
given adequate notice of, and means for accessing, the conference or call
In Regulation FD CDI 102.02, the SEC also made clear that companies may disseminate material
nonpublic information by including that information in Exchange Act documents publicly filed on
Edgar other than Form 8-Ks, such as a Form 10-Q or a proxy statement, within the time frames that
Regulation FD requires, as long as such disclosure is conspicuous and is not made in a piecemeal
fashion throughout the filing.
Company Responsible for Ensuring “Broad, Non-Exclusionary Distribution”
The SEC does not require any particular method for broadly and non-exclusively distributing
material nonpublic information to the public. The SEC stated that companies can choose their
method or combination of methods as long as the method is “reasonably designed to effect broad
public disclosure.”
The SEC emphasized that companies bear the responsibility for selecting a disclosure method or
combination of methods reasonably designed to effect broad, non-exclusionary distribution of the
information to the public, which is a facts and circumstances determination that varies by company.
To determine whether a disclosure method was reasonable, the SEC stated in Section II.B.4 of the
Regulation FD adopting release that it is likely to consider “all the relevant facts and circumstances,
recognizing that methods of disclosure that may be effective for some issuers may not be effective
for others.”
SEC’s Public Disclosure Model Uses Mix of Disclosure Methods
In Section II.B.4.b of the Regulation FD adopting release, the SEC suggested a series of steps that
companies can take to publicly disclose information. The SEC also recognized that companies
could comply with Regulation FD’s public disclosure requirement in other ways.

The SEC’s suggested paradigm combines a variety of methods to broadly disseminate material
information, such as a scheduled earnings release, as follows:
– Initially issuing a press release distributed through regular channels that contains the
material, nonpublic information;
– Then providing adequate notice, including date, time, and call-in information by press
release and/or a website posting of the upcoming conference call; and
– Finally, conducting the conference call in an open manner, permitting all investors to listen
by either telephone or through an Internet webcast.
The SEC also noted in footnote 73 of the Regulation FD adopting release that if a company is
making disclosure via a webcast or conference call, it should consider making the webcast or
call available for some reasonable period of time afterward so that people who miss the original
webcast or call can access the disclosures at a later time. And in Regulation FD CDI 102.01, the
SEC Staff encouraged companies that make a transcript or re-play of a conference call available
afterward to indicate in the notice how and for how long the record (e.g., re-play, webcast,
transcript) will be available to the public.
Press Release Typically Satisfies Public Disclosure Requirement
Companies can consider fulfilling Regulation FD’s “public disclosure” requirement by

disseminating information via press release by distribution through a widely followed news source
or wire service such as Dow Jones, Bloomberg, Reuters, Associated Press or Business Wire. The
SEC noted in footnote 70 of the Regulation FD adopting release that, in many cases, a widely
disseminated press release will be the best means for a company to provide broad, non-exclusionary
disclosure of information to the public.
However, if a company knows that the major wire services don’t routinely carry its press releases,
the SEC made clear in Section II.B.4.b of that release that use of this method alone would likely not
be deemed by the SEC to be reasonable under the particular facts and circumstances. In this case,
the company would be expected to employ other disclosure methods in addition to or instead of a
press release.
No Particular Disclosure Method Required
In Section II.B.4.b of the Regulation FD adopting release, the SEC stated that there is no single
method or combination of methods of disclosure required in order to fulfill Regulation FD’s
public disclosure requirements. Although companies that use Form 8-Ks to disclose information
can be confident that they have complied with Regulation FD, companies can choose any
method, or combination of methods, of disclosure reasonably designed to effect broad, non-
exclusionary distribution of the information to the public. If a company does not use a Form 8-K,
most practitioners recommend a combination of other methods (e.g., press release and website
disclosure) to ensure that broad distribution is effected.

Regulation FD 4-63
This flexibility is not unqualified because a company’s departure from its usual dissemination
practices could influence the SEC’s evaluation of whether a particular method is reasonable.
For example, the SEC indicated in the Regulation FD adopting release that it might question the
company’s judgment as to reasonableness if a company uses a last minute webcast to disseminate
its quarterly earnings results in the context of a concurrent, otherwise selective, disclosure of that
information when the company typically discloses its results by regularly disseminated press
releases. However, the SEC indicated in footnote 74 of that release that this does not mean that
companies can’t change their usual public disclosure practices on an ongoing (as opposed to
isolated) basis.
As an investor relations matter, companies should consider whether a dissemination method

or particular time of dissemination will upset investors, journalists or customers. For example,
disclosing information on Friday afternoon via a Form 8-K is not a sound investor relations
practice.
Provide Adequate Advance Notice of Upcoming Call or Meeting
If a company plans to hold an investor meeting that will be concurrently publicly disclosed via
webcast, Regulation FD CDI 102.01 and Section II.B.4.b of the Regulation FD adopting release are
instructive as to ensuring that the advance notice will comply with Regulation FD.
According to Regulation FD CDI 102.01, if a company wants to provide information to investors

through a publicly available conference call, it must provide adequate advance notice of the date,
time, subject matter and call-in information to comply with the public disclosure requirements
of Regulation FD. The same principles apply to planned public disclosure of material nonpublic
information via a webcast.
The CDI does not address the method of dissemination that must be used to provide the
advance notice; however, Section II.B.4.b of the Regulation FD adopting release makes clear
that the public must be given adequate notice of the event wherein the disclosures will be
made and the means for accessing the event. The SEC’s suggested model for making a planned
disclosure of material information set forth in Section II.B.4.b of the Regulation FD adopting
release contemplates use of a press release and/or website posting for purposes of the advance
notice requirement.
To ensure that the public is given adequate notice, notice of the webcast should be given by means
of a public announcement disseminated in a fashion that satisfies Regulation FD’s public disclosure
requirements set forth in Rule 101(e), i.e., via a Form 8-K or another method or combination of
information to the public, depending on the company’s usual practice and what the company believes
will result in broad, non-exclusionary distribution. Many (if not most) companies issue a press release
and also post an announcement of the webcast on their website, or issue a press release, post the press
release on their website and file a Form 8-K to reach as many people as possible—and this is typically
announced 1-2 weeks prior to the webcast.
Note that a Form 8-K is always required for earnings releases under Item 2.02 of Form 8-K.

Advance Notice for Conference Call Requires Certain Information
If a company wants to make public disclosure of material nonpublic information under Regulation
FD by means of a conference call, according to Regulation FD CDI 102.01, an adequate advance
notice must include the date, time, subject matter and call-in information for the conference call.
CDI 102.01 further provides:
Issuers also should consider the following non-exclusive factors in determining what constitutes
adequate advance notice of a conference call:
Timing: Public notice should be provided a reasonable period of time ahead of the
conference call. For example, for a quarterly earnings announcement that the issuer makes
on a regular basis, notice of several days would be reasonable. We recognize, however, that
the period of notice may be shorter when unexpected events occur and the information is
critical or time sensitive.
Availability: If a transcript or re-play of the conference call will be available after it has
how, and for how long, such a record will be available to the public.
Disclosure of Additional Information on Properly Noticed Call/Webcast Permitted
A company spokesperson may disclose additional material, non-public information relating to

the company’s original disclosure in the course of a properly noticed, Regulation FD-compliant
conference call or webcast without concern of violating Regulation FD.
Section II.B.4.b of the Regulation FD adopting release specifically contemplated that disclosures
during a properly noticed, publicly available earnings call would be deemed publicly disseminated
so that there wouldn’t be a Regulation FD violation for such disclosures, as follows:
We believe that issuers could use the following model, which employs a combination of
methods of disclosure, for making a planned disclosure of material information, such as a
scheduled earnings release:
– First, issue a press release, distributed through regular channels, containing

the information;
– Second, provide adequate notice, by a press release and/or website posting,

of a scheduled conference call to discuss the announced results, giving inves-
tors both the time and date of the conference call, and instructions on how to
access the call; and
– Third, hold the conference call in an open manner, permitting investors to

listen in either by telephonic means or through Internet webcasting.

Regulation FD 4-65
– By following these steps, an issuer can use the press release to provide the
initial broad distribution of the information, and then discuss its release
with analysts in the subsequent conference call, without fear that if it should
disclose additional material details related to the original disclosure it will
be engaging in a selective disclosure of material information. We note that
several issuer commenters indicated that many companies already follow this
or a similar model for making planned disclosures.
Note that if the presentation will be both in-person & webcast, the best practice is to simultaneously
provide any additional information to all attendees. For example—if you’ll distribute a slide deck
to in-person attendees, publicly furnish the slides shortly before the presentation starts.
Can “File” or “Furnish” Form 8-K
Filing or furnishing a Form 8-K are ways that companies can satisfy Regulation FD’s public dis-
closure requirement. As the SEC indicated in footnotes 67 and 68 of the Regulation FD adopting
release, companies must designate in the Form 8-K which Form 8-K Item is being used.
If information is furnished under Item 7.01, then the information will not be subject to liability
under Exchange Act Section 18, and the information will not be subject to automatic incorporation
by reference into the company’s Securities Act registration statements (and therefore assume
Securities Act Section 11 liability), unless the company takes steps to include that disclosure in a
filed report, proxy statement or registration statement.
Filing the information under Item 8.01 means that the information is deemed filed for the purposes
of Exchange Act Section 18 liability and will be automatically incorporated by reference into the
company’s Securities Act registration statements, which are subject to liability under Securities Act
Sections 11 and 12(a)(2).
All disclosures on Form 8-K, whether filed or furnished, are subject to the anti-fraud provisions of
the federal securities laws. Consistent with the SEC’s comments in Section II.B.4.a of the Regula-
tion FD adopting release, General Instruction B.6. of Form 8-K specifically provides that a report
under Item 7.01 or Item 8.01 will not be deemed an admission as to the materiality of any informa-
tion in the report that is required to be disclosed solely by Regulation FD.
May Use ’34 Act Filings Other Than Form 8-K to Publicly Disclose
In addition to other methods or combinations of methods of disclosure, the SEC Staff affirmed
in Regulation FD CDI 102.02 that companies may satisfy the public disclosure requirement by
including the information in a document filed electronically with the SEC other than a Form 8-K,
such as a Form 10-Q or a proxy statement, within the time frame that Regulation FD requires, as
long as such disclosure is conspicuous and is not made in a piecemeal fashion throughout the filing.
As a practical matter, Form 8-Ks are used much more frequently than other Exchange Act filings
because the timing of filing other SEC documents (such as Form 10-Qs and proxy statements)

is driven by numerous considerations and internal processes other than needing to make a
simultaneous or prompt public disclosure to comply with Regulation FD.
Evaluating Use of Corporate Website for Public Disclosure
At the time Regulation FD was adopted in 2000, the SEC indicated in Section II.B.4.b of the
Regulation FD adopting release that posting of information on a company’s website would not
by itself be sufficient to satisfy Regulation FD’s public disclosure requirement but that, with the
evolution of technology and associated greater investor access to the Internet, website posting may
be sufficient for certain companies in the future. In 2008, with the evolution of technology, the SEC
issued an interpretive release on the “Use of Company Websites,” affirming that website posting
of information may be an adequate disclosure method on a standalone basis for Regulation FD
purposes provided that certain requirements are met.
The principles-based guidance instructs companies as to how to analyze, based on their particular
facts and circumstances, whether information is deemed “public” for purposes of evaluating
Pursuant to Rule 101(e)(2) of Regulation FD, whether website posting of information itself satisfies
the “public disclosure” (of material nonpublic information) requirement of Regulation FD upon
the making of a selective disclosure (whether intentional or non-intentional) depends on whether
the website posting is “reasonably designed to provide broad, non-exclusionary distribution of the
information to the public.”
In connection with a company’s evaluation of whether its website postings of information meet
Regulation FD’s public disclosure requirement, the interpretive guidance also instructed a company
to consider its website’s capability to meet the applicable (simultaneous or prompt) public
disclosure timing requirements associated with a selective disclosure.
Corporate Website Often Used with Other Methods
Consistent with the SEC’s remarks in Section II.B.4.b of the Regulation FD adopting release, which
the SEC noted in footnote 61 of its interpretative guidance on use of a company’s website, com-
panies often use their websites in combination with other methods to effect the public disclosure
required under Regulation FD. For example, many companies combine earnings press releases with
website disclosure to ensure or bolster their public disclosure.
Increasing Number of Companies Rely on Website on Stand-Alone Basis—But Still Not

Majority
In a 2017 survey of Regulation FD practices conducted by TheCorporateCounsel.net, 29% of

companies indicated that they post information on their websites and consider the website postings
sufficient for Regulation FD purposes—i.e., they view their website as a “recognized channel of

Regulation FD 4-67
distribution.” This was a big jump from the less than 1% of companies who responded this way to
the same question in the 2010 version of the survey. However, a majority of companies—52%—
indicated that they don’t yet take the position that their website postings satisfy FD’s public
disclosure requirements.
Following the issuance of the SEC’s interpretive guidance, some companies (such as Expedia)
began the practice of issuing summary press releases that simply state that the company has posted
its earnings release on the company website and including a link, as follows:
Expedia, Inc. (NASDAQ: EXPE) today issued its fourth quarter and full year 2011
earnings press release that is available now at http://www.expediainc.com/ir. The press
release is also available on the SEC’s website at http://www.sec.gov. As announced
previously, the company will host a conference call today to discuss the press release at
2:00 p.m. Pacific Time (PT) / 5:00 p.m. Eastern Time (ET).
In addition to the press release, the live audiocast and replay will be available to the
public at http://www.expediainc.com/ir. Replays of the conference call are expected to be
available for at least three months after the call date.
Some companies have increasingly considered relying on the company website as a stand-alone
basis for disseminating earnings releases as a result of limitations with the wire service’s ability to
handle images and graphics that management would like to include in the earnings release. We’ve
seen some criticism and blowback to this approach from reporters & retail investors. They may be
unable to access the information as quickly as institutional investors with machine-readable trading
services—and share prices may move even before news services can report the numbers.
Companies should carefully consider the factors from the SEC’s 2008 guidance to evaluate whether
website information is timely & readily available to the securities marketplace in general—such as
whether the information is prominently disclosed on the web site in a known & routine location,
whether it’s presented in a readily-accessible location & format, and whether the website can
handle increased traffic without crashing.
While Alphabet/Google is frequently cited for its announcement in 2010 that it would use its
website exclusively to release its earnings information, because the release of earnings information
is governed by Item 2.02 of Form 8-K, which Google necessarily adheres to, Google’s website has
in fact been used in combination with other disclosure methods to effect public disclosure of this
information.
Other companies following this path include Sun Microsystems (announcement in July 2010),
Microsoft (announcement in October 2010) and Ford.
Use of Blog Postings for “Public” Disclosure
The SEC’s interpretive release on the “Use of Company Websites” makes clear that blog postings
would be analyzed in the same way as other website postings for purposes of Regulation FD

compliance. In that release, the SEC noted in footnote 60, in conjunction with its discussion
of companies’ needs to consider the ability of their corporate websites to meet the applicable
(simultaneous or prompt) public disclosure timing requirements associated with a selective
disclosure: “For purposes of Regulation FD, a posting on a blog, by or on behalf of the company,
would be treated the same as any other posting on a company’s web site. The company would have
to consider the factors outlined…to determine if the blog posting could be considered ‘public.’”
The non-exclusive list of factors referred to in the footnote are those factors that the SEC provided
in that release to assist companies’ evaluation of both the “public” nature of information on their
corporate websites for purposes of the applicability of Regulation FD, and whether their website
postings could satisfy the alternative means of public disclosure set forth in Rule 101(e)(2) of
Regulation FD, i.e., whether the method of disclosure is “reasonably designed to provide broad,
non-exclusionary distribution of the information to the public.”
And as with the evaluation of whether website postings of information meet Regulation FD’s public
disclosure requirement, pursuant to the interpretive guidance, companies would also need to con-
sider the capability of their blog postings to meet the applicable (simultaneous or prompt) public
disclosure timing requirements associated with a selective disclosure.
Use of Social Media for “Public” Disclosure
In April 2013, the SEC issued a Section 21(a) Report of Investigation providing guidance on the
application of Regulation FD to disclosures made through social media (Rel. No. 69279). In the
report, the SEC clarifies that the principles outlined in its 2008 interpretive guidance on the use
of company websites—which addresses when information posted on a company website may be
considered “public” for purposes of Regulation FD—apply equally to disclosures made via social
media.
According to the 2008 guidance, a company makes “public” disclosure when it distributes
information “through a recognized channel of distribution.” As applied to social media, whether a
company’s social media channel is a “recognized channel of distribution” will depend on the steps
the company has taken to alert the market to its social media channel and its disclosure practices—
as well as the use by investors and the market of the company’s social media channel.
The report emphasizes the SEC’s expectation that companies will “examine rigorously” the non-
exhaustive list of factors included in the 2008 guidance to evaluate whether a particular social
media channel is a “recognized channel of distribution” for communicating with their investors.
As with website disclosure, this requires companies to conduct a thorough facts and circumstances
analysis before being in a position to conclude that their disclosures made via a social media
channel will be “public” for Regulation FD purposes.
NYSE & Nasdaq Require Prompt Disclosure of Material Information
Sections 202.05 and 202.06 of the NYSE Listed Company Manual require that there be prompt
disclosure of material information that would reasonably be expected to affect the value of

Regulation FD 4-69
the listed company’s securities, and Rule 5250 of the Nasdaq Listing Rules requires that there
be prompt disclosure of material information that would reasonably be expected to affect the
value of the listed company’s securities or influence investors’ decisions by means of any
Regulation FD‑compliant method (or combination of methods).
NYSE Policy on Disclosure of Material Information
Rule 202.05 of the NYSE Listed Company Manual requires a listed company to release
quickly to the public any news or information that might reasonably be expected to materially
affect the market for its securities. Rule 202.06 requires this information to be released using
any Regulation FD compliant method (or combination of methods). While not requiring them
to do so, the NYSE encourages listed companies to comply with the immediate release policy
by issuing a press release or filing a Form 8-K.
The NYSE lists the following examples as news that is subject to its immediate release policy:
− Annual and quarterly earnings;

− Dividend announcements;
− Mergers and acquisitions;
− Tender offers;
− Stock splits;
− Major management changes;
− Substantive items of unusual or non-recurrent nature;
− News of major new products;
− Contract awards;
− Expansion plans; and
− Discoveries.
Under the NYSE policy, unfavorable news should be reported as promptly and candidly
as favorable news. Companies are also cautioned against burying important disclosure in a
volume of press releases since important items can become confused with trivia.
In addition to immediate release of material information, Section 202.06 of the NYSE Listed
Company Manual requires companies to notify the NYSE prior to disseminating material
news from 7:00 am to 4:00 pm. Note these hours extend even before the market opens at
9:30 am. Companies will need to provide NYSE with the copy of any material announcement,
with information about the Reg FD-compliant method it intends to use to disseminate the
news and how NYSE can locate it once published. This information can be submitted through
NYSE’s Listing Manager or emailed to nysealert@nyse.com.
Upon notification, the NYSE Staff may order a temporary trading halt in a company’s
securities to allow the information to be disseminated. The NYSE’s Market Watch team is
responsible for the application of the exchange’s “material news & trading halt” policies. The
Market Watch team wants companies to give them at least 10 minutes in advance of release
and even further in advance—if you can—for something that’s lengthy or complicated. The
Market Watch team then assesses whether the information is truly material—and if it is, the

NYSE will briefly halt trading in the stock pending dissemination of the news. Often, that
trading halt will be just a few minutes in length. They do this many times over the course of
a week so it’s not an extraordinary event. The person staffed with notifying NYSE may also
need to answer questions regarding the news.
One potential problem area is when a CEO or other senior officer has said something at a
conference and the market will get roiled. That effectively is a violation of the NYSE’s timely
alert rules. Even though that’s a verbal comment—it has the same effect on the market as if
you had sent out a press release that had material news. Therefore, the NYSE needs advance
notice of that. The way to handle that is to put out any material news in an 8-K or press
release in advance of the statements being made if possible (i.e., the statements were not
inadvertent)—otherwise, the NYSE will likely halt trading in your stock for a period of time.
If material information is being disseminated after the market closes at 4:00 pm ET, companies
are required to wait until the earlier of publication of the company’s official NYSE closing
price or five minutes after the NYSE’s official closing time (typically 4:00 p.m. Eastern
Time). The only exception is if a Regulation FD release is necessary following unintentional
selective disclosure. The NYSE adopted this rule because trading on non-NYSE venues often
continues after-market, and price differences and investor confusion can occur if material
news announcements occur before the closing price is posted.
If possible, the NYSE recommends that companies delay material announcements until the
earlier of the publication of the company’s official NYSE closing price or fifteen minutes after
the NYSE’s official closing time—i.e., wait an extra ten minutes beyond what’s required by
the rule.
Note that the NYSE is not monitoring the filing of Form 8-Ks or other SEC filings—thus,
filing a Form 8-K with the SEC doesn’t satisfy its notification requirements.
Nasdaq Policy on Disclosure of Material Information
Nasdaq Rule 5250(b)(1) requires a listed company to promptly disclose to the public any
material information that would reasonably be expected to affect the value of the company’s
securities or influence investors’ decisions. A company can make these disclosures through any
Reg FD compliant method of disclosure.
Companies are required to notify Nasdaq MarketWatch at least 10 minutes prior to the release
of material information in the following categories when the public release of the information
is made between 7:00 am and 8:00 pm eastern (if information is released outside these hours,
the company must notify MarketWatch of the material information prior to 6:50 am eastern):
– Financial-related disclosures, including quarterly or yearly earnings, earnings

restatements, pre-announcements or “guidance”
– Corporate reorganizations and acquisitions, including mergers, tender offers,

asset transactions and bankruptcies or receiverships

Regulation FD 4-71
– New products or discoveries, or developments regarding customers or suppliers

(e.g., significant developments in clinical or customer trials, and receipt or
cancellation of a material contract or order)
– Senior management changes of a material nature or a change in control
– Resignation or termination of independent auditors, or withdrawal of a

previously issued audit report
– Events regarding the company’s securities—e.g., defaults on senior securities,

calls of securities for redemption, repurchase plans, stock splits or changes in
dividends, changes to the rights of security holders or public or private sales of
additional securities
– Significant legal or regulatory developments
– Any event requiring the filing of a Form 8-K
Nasdaq MarketWatch will review the company disclosure and, in certain circumstances, after
discussing the disclosure with the company, will implement a temporary trading halt to allow
the public to digest the news.
Notifications to Nasdaq MarketWatch are made through the Electronic Disclosure portal
available at www.nasdaq.net. Companies using a press release or 8-K (or other Exchange Act
Filing filed on Edgar) should submit a copy of that information (as the Nasdaq staff is not
monitoring SEC filings itself). When using a conference call, press conference or webcast as
the primary means of dissemination, companies are required to provide MarketWatch with
the press release announcing the future conference call, press conference or webcast and a
descriptive summary of the material elements to be announced in the call, press conference or
webcast if the press release does not contain such a summary.
When a company wishes to release material information after the close of the regular market
at 4:00 pm eastern, we would recommend waiting until at least 4:01 pm eastern, after the
Nasdaq closing price has been calculated, and preferably until 4:05 pm eastern. This limits
the potential for a sudden change in the closing price and price dislocation between different
market venues.
If ever in doubt about whether information is “material” enough—or if you’re uncertain about
dissemination timing or logistics—you should call your Exchange rep and talk with them about the
situation in advance and obtain instructions about how—and when—to notify them and the market.

f. Timing of Disclosure
Timing Depends on Whether Selective Disclosure Was Intentional

The timing of public disclosure required under Regulation FD depends on whether the information
is disseminated intentionally or non-intentionally.
Pursuant to Rule 100(a)(1), if the disclosure is “intentional,” the company must disclose the same
information to the public simultaneously to avoid violating Regulation FD. If a company is using
Form 8-K as its dissemination method, then it needs to file or furnish the Form 8-K and, as clarified
by the SEC Staff in Regulation FD CDI 102.03, confirm that the Form 8-K was accepted by and is
publicly available on Edgar before making a selective disclosure. There is no requirement to wait until
the company believes the information in the Form 8-K has been broadly disseminated in the market.
There is no way to “cure” an intentional selective disclosure. Nonetheless, if a company has any
room to argue that the disclosure was non-intentional, it should promptly publicly disclose the
information because this good faith action could bolster the company’s position that the selective
disclosure was non-intentional. Even though the SEC did not adopt a safe harbor for good faith
efforts to comply with Regulation FD or for good-faith materiality determinations, the reckless
standard provides some breathing room for companies that have demonstrated a good faith effort to
comply.
If the selective disclosure was “non-intentional,” then, according to Rule 100(a)(2), the company
must publicly disclose the information “promptly” after a company’s “senior official” learns (or is
reckless in not knowing) that the information is both material and nonpublic.
“Intentional” Disclosure Triggered by Knowing or Reckless Conduct
Rule 101(a) of Regulation FD provides that a selective disclosure is “intentional” when the
person making the disclosure knows, or is reckless in not knowing, that the information they are
communicating is both material and nonpublic.
The SEC indicated in Section II.B.2 of the Regulation FD adopting release that this standard
(which is a more lenient standard that that ordinarily used in disclosure rules under the securities
laws) provides additional assurance that companies needn’t fear being second-guessed on mistaken
materiality judgments in close cases. Even though the SEC did not include an express safe harbor
provision for good faith efforts to comply with Regulation FD or for good faith determinations that
information was not material, it noted in Section II.B.3.a of the adopting release that in view of the
definition of recklessness prevalent in the federal courts, it is unlikely that companies engaged in
good faith efforts to comply will be considered to have acted recklessly.
In Section II.B.3.a of the adopting release, the SEC highlighted the relevance of the circumstances
in assessing the reasonableness of materiality judgments. For example, what might be reckless in
the context of a prepared written statement may not necessarily be reckless in the context of an
impromptu answer to an unanticipated question. In addition, the SEC noted in footnote 57 of the

Regulation FD 4-73
adopting release that a pattern of prior “mistaken” materiality judgments diminishes the credibility
of a claim that a disclosure was not intentional.
“Intent” Based on Facts & Circumstances
Intent is a facts and circumstances determination of whether the person making the disclosure either:
– Had actual conscious awareness that the information was both material and nonpublic; or
– Was reckless in not knowing that the information was both material and nonpublic.
Meaning of “Simultaneous”
The SEC did not define “simultaneous” in Regulation FD or discuss the meaning of the term in the
Regulation FD adopting release. Thus, assuming that its literal meaning governs, “simultaneous”
means that if a company makes an intentional disclosure, it should broadly distribute the
information to the public before or at the same time as that intentional selective disclosure.
Meaning of “Non-Intentional”
Regulation FD does not define “non-intentional.” Based on the meaning attributable to

“intentional,” the consensus view is that a non-intentional disclosure occurs when the person
making the disclosure does not know, and is not reckless in not knowing, that such information is
both material and nonpublic. For example, it would be a non-intentional disclosure if an officer
gives an impromptu response to an unanticipated question privately asked by an analyst, and that
response provides material information that the speaker reasonably, but mistakenly believed had
already been publicly disclosed.
Pursuant to Rule 100(a)(2) of Regulation FD, a non-intentional disclosure triggers an obligation

on the part of the company to publicly disclose that information “promptly” after a senior official
knows, or is reckless in not knowing, that the disclosure is both material and nonpublic.
Be Prepared to Make Quick Materiality Evaluations
The process of determining whether a company’s non-intentional disclosure is material varies

depending on the disclosure practices of the company, but a process should be pre-established
to quickly handle non-intentional, potentially material selective disclosures for Regulation FD
purposes. To make the determination timely, ideally, a company should consider having a “SWAT”
team—which may or may not be its disclosure team—that makes a recommendation to someone
responsible for the ultimate decision (normally an authorized spokesperson in conjunction with
inside and/or outside counsel).
Evaluating materiality can be difficult. If it is not an “easy” case, companies should consider,
among other potentially relevant factors, the following:
– Stock market and media reaction (if any) to the information;

– What the company has already disclosed about the inadvertently selectively disclosed
matter (e.g., whether the selectively disclosed information is just an insignificant detail of
a previously publicly disclosed matter or an incomplete piece of a matter not previously
publicly disclosed);
– Whether the company typically has publicly disclosed similar information in the past; and
– Potential harm of broad distribution at the present time.
Note that express confidentiality agreements may be obtained from recipients of information after a
selective disclosure has been made to address an inadvertent selective disclosure, provided that the
recipients have not disclosed the information or traded the company’s securities prior to agreeing to
maintain the information in confidence. The SEC specifically noted in footnote 28 of the Regulation
FD adopting release that the company may try to avoid any harm resulting from a non-intentional
selective disclosure in this manner.
Definition of “Promptly”
Pursuant to Rule 100(a)(2) of Regulation FD, if a selective disclosure was non-intentional, then the
company must publicly disclose the information “promptly.” Promptly means as soon as reasonably
practicable after a senior official learns of the non-intentional disclosure and knows (or is reckless
in not knowing) that the information disclosed was both material and nonpublic.
Based on the definition of promptly set forth in Rule 101(d) of Regulation FD, this translates to the
later of 24 hours or the commencement of the next day’s trading on the New York Stock Exchange
(to account for non-intentional selective disclosures made close to or over a weekend or holiday)
after the senior official learns of the non-intentional disclosure and knows (or is reckless in not
knowing) that the information disclosed was both material and nonpublic. This is so regardless of
whether the company’s securities are actually traded on the NYSE.
No Duty to Disclose Due to Merely Possessing Information
Regulation FD does not alter longstanding principles about when companies have a duty to
disclose. As before Regulation FD, companies ordinarily have a duty to disclose material nonpublic
information only:
– If they trade, or their insiders trade, on confidential information;

– If they previously made inaccurate, incomplete or misleading disclosures; or
– When statutes, rules or regulations otherwise require (e.g., disclosures required to be
contained in periodic and current reports and other Exchange Act documents).
disclosure of material information that would reasonably be expected to affect the value of the
listed company’s securities, and Rule 5250 of the Nasdaq Listing Rules requires that there be

Regulation FD 4-75
prompt disclosure of material information that would reasonably be expected to affect the value of
the listed company’s securities or influence investors’ decisions by means of any Regulation FD-
compliant method (or combination of methods).
Reg FD Doesn’t Itself Create or Impact Duty to Update
In Regulation FD CDI 101.02 and Section II.B.7 of the Regulation FD adopting release, the SEC
specifically stated that Regulation FD does not change existing law regarding any duty to update or
duty to correct.
As a practical matter, while Regulation FD and other securities laws have encouraged and resulted
in companies providing more forward-looking information and more public disclosure overall, thus
creating greater opportunity for disparities between projections and subsequent actual results, few
circuit courts have imposed liability based on a duty to update (although several have recognized that
such a duty may exist in certain circumstances).
Katten Muchin notes: “A duty to update may arise only where the triggering statement is forward-
looking and contains a definite material statement that “remains alive” in the minds of investors.
Thus, courts focus their inquiry on the original statement and whether it is the type that would
trigger any duty to update.”
Virtually all companies explicitly disclaim any duty to update their forward looking statements in
their disclosures. Often this is done as part of the company’s “disclaimer” to secure the protection
of the SEC’s statutory safe harbor for forward-looking statements—the Private Securities Litigation
Reform Act of 1995.
g. Securities Offerings & Regulation FD
Reg FD Doesn’t Apply to Most Registered Securities Offerings
Pursuant to Rule 100(b)(2)(iii), Regulation FD does not apply to disclosures made in connection
with registered securities offerings for capital formation purposes, other than specific types of
registered shelf offerings under Securities Act Rule 415 that are of an ongoing and continuous nature
(including secondary offerings, dividend or interest reinvestment plans and employee benefit plans).
Registered securities offerings are already subject to disclosure requirements and civil liability
provisions under Section 5 of the Securities Act, which the SEC indicated in Section II.B.6.a of
the Regulation FD adopting release it deemed adequate for purposes of substantially reducing
the likelihood of selective disclosures of material nonpublic information in connection with such
offerings. The SEC Staff affirmed in Regulation FD CDI 101.07 that road show disclosures made in
connection with most registered public offerings (i.e., those expressly excluded from the coverage of
Regulation FD) are not subject to Regulation FD.
The exemption for registered securities offerings notwithstanding, as noted by the SEC in footnote
82 of the Regulation FD adopting release, regular communications made by a company, such as

quarterly analyst conference calls, are still subject to Regulation FD even though the company may
be in the midst of a registered offering.
Unregistered offerings are not subject to the same disclosure and liability protections applicable to
registered securities offerings. Thus, unregistered offerings are subject to Regulation FD.
Reg FD Applies Before & After Registered Underwritten Offerings
Rule 101(g)(1) of Regulation FD defines when registered underwritten offerings begin and end. As
the SEC made clear in Section II.B.6.a.i and footnote 82 of the Regulation FD adopting release,
communications made before and after such periods, as well as communications made in the
ordinary course (e.g., routine disclosures that happen to be concurrent with a pending registered
offering), are not exempt from Regulation FD.
A registered underwritten offering begins when a company reaches an understanding with a

managing underwriter and continues until the later of the end of the period during which a dealer
must deliver a prospectus or the sale of the securities (unless the offering is sooner terminated).
Reg FD Applies Before & After Registered Non-Underwritten Offerings
Rule 101(g)(2) of Regulation FD defines when registered non-underwritten offerings begin and
end. As the SEC made clear in Section II.B.6.a.i and footnote 82 of the Regulation FD adopting
release, communications made before and after such periods, as well as communications made in
the ordinary course (e.g., routine disclosures that happen to be concurrent with a pending registered
offering), are not exempt from Regulation FD.
The duration of registered, non-underwritten offerings depends on the type of offering.
If it is a continuous offering, it begins when a company makes its first bona fide offer in a takedown
of securities and it continues until the later of the end of the period during which each dealer
must deliver a prospectus, or the sale of the securities in that takedown (unless the takedown ends
earlier).
If it is a business combination, it begins when the first public announcement of the transaction
is made and continues until the completion of the vote or the expiration of the tender offer, as
applicable (unless the transaction is sooner terminated).
For any other non-underwritten offering, it begins when a company files a registration statement,
and it continues until the later of:
– End of the period during which each dealer must deliver a prospectus, or
– Sale of the securities (unless the offering is sooner terminated).

Regulation FD 4-77
Reg FD Applies to Unregistered Offerings
As discussed in Section II.B.6.a.ii of the Regulation FD adopting release, Regulation FD applies to

company disclosures in connection with unregistered offerings (e.g., private or offshore offerings),
including the information in private placement memoranda or road shows (Regulation FD does not
distinguish between oral and written communications). As a result, companies must either publicly
disclose the material, nonpublic information they privately disclose to investors, or obtain express
agreements from each investor to keep the information confidential.
Similar to public offerings, anti-fraud rules apply to unregistered offerings. The anti-fraud rules
require that companies disclose any material information they possess to purchasers. When a company
complies with this requirement to provide material nonpublic information to investors, it must either
get investors to expressly agree to keep the information confidential pursuant to Regulation FD’s
confidentiality exclusion or make a simultaneous public disclosure as required under Regulation FD.
Regulation FD only applies to unregistered offerings conducted by companies that already are
publicly traded. Regulation FD does not apply to privately held companies.
Material Information Disclosed During Private Placement Subject to Reg FD
Unless the recipients of the information expressly agree to keep the information confidential, a public
company communicating material information privately with securities market participants during a
private placement must broadly disclose the information to the public or risk violating Regulation FD.
The SEC made clear in Section II.B.6.a.ii of the Regulation FD adopting release that public disclosure
pursuant to Regulation FD is appropriate even if it calls into question the private placement or other
exemption from Securities Act registration upon which the company is relying.
Absent confidentiality agreements, the company should broadly disseminate the information to
the public through a recognized method or combination of methods to effect public disclosure that
satisfies Regulation FD before or simultaneously with communicating the information privately to
securities market professionals or prospective investors.
Reg FD Applies to Unregistered Offering Road Shows
Regulation FD applies to communications made in connection with unregistered offerings such

as private placements. Therefore, as the SEC Staff made clear in Regulation FD CDI 101.07, road
show communications in connection with such offerings are subject to Regulation FD.
A company wishing to discuss material nonpublic information with securities market professionals
or prospective investors during a road show may either obtain a confidentiality agreement
from each recipient of the information or simultaneously publicly disclose (in accordance with
Regulation FD) the information that it plans to discuss privately. Risks of Regulation FD violations
can be further minimized by including in the publicly disclosed information any other information
that the company expects will be responsive to anticipated questions from analysts and investors (if
and to the extent that the company will want to discuss such information).

Private Placement Investors May Be Unwilling to Enter Confidentiality Agreements
Investor participants in a private placement context may refuse to expressly agree to keep material
nonpublic information confidential because if they expressly agree, they have a duty to “disclose or
abstain from trading” under Rule 10b-5, which means they can’t trade in those securities until the
company publicly discloses the information. As investors often want the flexibility to keep trading
in the company’s securities—particularly other types of securities—they may be unwilling to enter
into this type of agreement. This is particularly true for institutional investors who often trade in the
different types of securities that a company has issued.
Reg FD Public Disclosure Requirement May Impact Private Placement Exemption
Absent express confidentiality agreements with the recipients of the information, a company
planning to selectively disclose material information during an unregistered offering must make
public disclosure of the information in accordance with Regulation FD. Companies should consider
whether such selective disclosure and thus, Regulation FD-required simultaneous public disclosure,
will have an adverse effect on their ability to rely on a private placement exemption due to the
general solicitation prohibition.
In Section II.B.6.a.ii of the Regulation FD adopting release, the SEC indicated that it
had carefully considered the concerns by commenters about applying Regulation FD to
unregistered offerings, but ultimately decided that, because such offerings are not subject to
the full public disclosure and liability protections that the Securities Act applies to registered
offerings, unregistered offerings should not be exempt, and that companies should either obtain
confidentiality agreements or provide broad public disclosure of selectively communicated
information in accordance with Regulation FD.
It is possible to do this without blowing your Securities Act exemption—by complying with Rule
135c. Securities Act Sections CDI 139.32 says:
Question 139.32
Question: An Exchange Act reporting company is conducting an exempt offering

pursuant to Regulation S and Rule 144A and intends to include material non-public
information in the offering memorandum to be distributed to investors in the exempt
offering. In order to satisfy its obligations under Regulation FD, may the company
file the complete offering memorandum as an exhibit to an Item 7.01 Form 8-K
during the time the offering memorandum is distributed to potential investors in the
exempt offering?
Answer: No. The filing of the complete offering memorandum on Form 8-K during
the exempt offering period likely would be inconsistent with the exemptions. To
avoid this concern while still complying with Regulation FD, the company could
file a Form 8-K that sets forth the material non-public information that is included

Regulation FD 4-79
in the offering memorandum, including information about the offering of the type
permitted to be disclosed pursuant to Securities Act Rule 135c. [Mar. 4, 2011]
Investment Bankers Covered by Reg FD as Company Agents
As “agents” of the company who are considered to “stand in the shoes” of the company, investment
bankers need to be careful to not violate Regulation FD.
Investment bankers have access to material, nonpublic information as temporary insiders.

Therefore, they cannot selectively disclose the information to offerees or other securities market
participants (such as analysts or other investment banker personnel who are not temporary
insiders). By “stepping into the shoes” of the company, they have the same obligations to maintain
information in confidence and can be liable for and trigger Regulation FD violations.
Communications in Connection with Registered M&A Exempt
Although not specifically discussed in the Regulation FD adopting release, Regulation FD does not
apply to disclosures made in connection with registered mergers and acquisitions based on Rule
100(b)(2)(iii) of Regulation FD pertaining to registered securities offerings, which the SEC broadly
discussed in Section II.B.6.a.i of the Regulation FD adopting release.
So companies can continue one-on-one communications with large investors or road shows with
a limited audience during these transactions. Rule 101(g) of Regulation FD defines when covered
registered securities offerings are deemed to commence and end, with communications made before
and after such period being subject to Regulation FD.
Reg FD Applies to Specified Ongoing Registered Shelf Offerings
Regulation FD applies if an ongoing shelf registration relates to:
– Selling shareholder secondary offering;

– Registered dividend or interest reinvestment plan or direct stock purchase plan;
– Employee stock purchase program; or
– Shelf registration for exercise, conversion, or resale of underlying securities.
As discussed in footnote 80 of the Regulation FD Adopting Release, the SEC accepted these
offerings from the registered securities offering exemption in the rule due to their ongoing and
continuous nature, which, if the offering exemption applied, would have had the effect of excluding
the company’s communications from Regulation FD for extended periods of time. The SEC also
indicated that companies engaged in these types of continuous offerings should be accustomed to
resolving securities law issues relating to their public disclosures of material information during
such offerings.

Note that it’s not just shelf takedowns or other registered equity offerings where Reg FD comes into
play—if you have a resale offerings and offerings on Form S-8, you’ll need to disclose material
information. The July – August 2021 issue of The Corporate Counsel points out that the “SEC’s
Division of Enforcement is not shy about pointing to sales under Form S-8 registration statements
to justify allegations of violations of Section 17(a) of the Securities Act, even in the absence of any
other financing activities.”
h. Violations of Regulation FD
Violating Reg FD Won’t Itself Trigger Private Lawsuit
Failure to comply with Regulation FD may give rise to a possible SEC enforcement action, but
not a private lawsuit (at least not based on Regulation FD). The SEC Staff can commence an
enforcement proceeding against companies either administratively or in federal court for engaging
in selective disclosure.
The SEC explicitly stated in Section II.B.7 of the Regulation FD adopting release that Rule 102
of Regulation FD was designed to make clear that Regulation FD does not create new duties
for purposes of Rule 10b-5 liability; therefore, private plaintiffs cannot sue either directly or
derivatively in a shareholders derivative lawsuit based on allegations that a company violated
Regulation FD.
SEC Deliberately Limited Consequences of Violating Reg FD
A company that violates Regulation FD:
– Does not necessarily violate the anti-fraud provisions of Rule 10b-5;
– Does not lose its eligibility to use short-form registration statements, such as Form S-3 or
Form S-8;
– Does not fall out of compliance with the current public information requirements of Rule 144;
and
– Is still able to rely on the safe harbors for forward-looking information.
Rule 102 of Regulation FD provides that a failure to make a public disclosure under Regulation
FD is not a Rule 10b-5 violation. Rule 103 of Regulation FD addresses the impact of a Regulation
FD violation on a company’s reporting status under the Securities Exchange Act of 1934. The SEC
specifically discussed in Sections II.B.6.b and II.B.7 of the Regulation FD adopting release that a
company’s failure to comply with the rule won’t affect whether it is considered current or, where
applicable, timely in its Exchange Act reports for purposes of Form S-8, short form registration on
Form S-3 and Rule 144, and won’t be deemed to violate Rule 10b-5.

Regulation FD 4-81
Independent Auditors May Be Required to Report Reg FD Violations
Although not addressed in the Regulation FD adopting release, note that a company’s independent
auditor may be required to report a Regulation FD violation. Pursuant to Section 10A of the
Exchange Act, if during the course of an audit, the auditor detects, or becomes aware of information
indicating that a Regulation FD violation has occurred, then it must:
(1) determine whether it is likely that an illegal act has occurred and, if so, determine and con-
sider the possible effect of the violation on the company’s financial statements; and
(2) as soon as practicable, inform the company’s management about the violation, and assure
that the audit committee of the issuer, or the board of directors of the issuer in the absence of
such a committee, is adequately informed about illegal acts that have been detected or have
otherwise come to the attention of the firm in the course of the audit, unless the illegal act is
clearly inconsequential.
Disclosure Violations May Be Actionable on Other Grounds
There is no private right of action for Regulation FD violations. However, a Regulation FD viola-
tion may enable the plaintiffs’ bar to sue a company under other laws. Regulation FD’s exclusion
from private rights of action relates only to failures to make Regulation FD-required disclosures.
For example, companies violating (or even complying) with Regulation FD may trigger violations of:
– Duty to correct or duty to update (if any) under Section 10(b) and Rule 10b-5;
– “Entanglement” or “adoption” theories associated with the company’s active participation in

preparation or endorsement of analysts’ reports; and
– Insider trading laws (if a Regulation FD violation involves a third party making trades that
benefit the selectively disclosing party, the disclosure may lead to a civil or criminal pro-
ceeding by the SEC under existing insider trading laws, including as an aider and abettor).
Learn more in our “Insider Trading Policies Chapter.”
Regulation FD does not affect how companies might be liable under Rule 10b-5 or Section 18 of
the Securities Exchange Act of 1934, or Section 11 of the Securities Act of 1933.
Employees May Be Individually Liable for Reg FD Violations
The SEC can take action against employees responsible for violations of Regulation FD, particularly
control persons and authorized spokespersons, regardless of whether it takes action against the company.
As noted by the SEC in Section II.B.7 and footnotes 91 and 92 of the Regulation FD adopting
release, an employee may personally be held liable in a cease-and-desist proceeding under S ection
21C of the Securities Exchange Act of 1934 or as an aider and abettor of the violation under
Section 20(e) of the Securities Exchange Act of 1934.

In well-publicized cases prior to SEC v. Christopher A. Black, Case No. 09-CV-0128 (S.D. Ind.,
September 24, 2009) (e.g., Schering-Plough, Flowserve, and Siebel II), the SEC had filed suit
against both the company and its senior officials alleged to have violated Regulation FD. SEC
v. Christopher A. Black represented a departure from the (then) norm due to the fact that the
SEC brought an enforcement action against only the senior official who had allegedly violated
Regulation FD and not also against the company. The case is notable for that reason, as well as the
fact that the company’s implementation of appropriate policies and employee training were among
the several factors the SEC indicated it had considered determinative in deciding not to bring an
enforcement action against the company.
On September 6, 2013, the SEC issued a cease-and-desist order (Release No. 70337) settling
charges that the former head of investor relations at First Solar, Inc. violated Regulation FD. Again,
notably, the SEC didn’t bring any charges against the company for several reasons including
the company’s extraordinary cooperation with the SEC’s investigation, its cultivation of an
environment of compliance through the use of a disclosure committee that focused on Regulation
FD compliance, its issuance of a press release containing the material nonpublic information upon
discovering the violation and its undertaking of remedial measures including providing Regulation
FD training to all employees.
SEC’s Reg FD Enforcement May Take Different Forms
The SEC can enforce Regulation FD through various actions. In Section II.B.7 of the Regulation
FD adopting release, the SEC noted that it could bring:
– Administrative enforcement action seeking a cease and desist order;

– Civil action seeking an injunction and/or civil money penalties; and/or
– Administrative enforcement action against a “control person.”
i. Policies & Procedures
Adoption & Adherence to Reg FD Policies/Procedures Strongly Advised
Regulation FD does not require companies to adopt policies and procedures to avoid violations.
However, in footnote 90 of the Regulation FD adopting release, the SEC stated that it
expected most companies to use policies as a safeguard against selective disclosure of material
non‑public information. Approximately 69% of respondents to a 2017 survey conducted by
TheCorporateCounsel.net indicated that their companies had a written policy addressing Regulation
FD practices, with an additional approximately 7% noting that they were in the process of drafting
such a policy.
Companies are required to maintain disclosure controls and procedures to ensure that information
required to be disclosed in public reports is recorded, processed, summarized and reported within the
required timeframes. Having a written external communications policy can be an important part of

Regulation FD 4-83
a company’s disclosure controls and procedures and should be coordinated with other aspects of a
company’s disclosure procedures such as those relating to the company’s periodic and current reports.
The SEC also indicated in footnote 90 of the Regulation FD adopting release that implementation
and adherence to an appropriate policy may often be relevant in determining whether a selective
disclosure was intentional. And recent case law and SEC enforcement actions certainly suggest that
establishing and adhering to a formal Regulation FD policy will be among the factors considered
by the SEC in determining a company’s liability for its employees’ misconduct.
In well-publicized cases prior to SEC v. Christopher A. Black, Case No. 09-CV-0128 (S.D.
Ind., September 24, 2009) (e.g., Schering-Plough, Flowserve, and Siebel II), the SEC had filed
suit against both the company and its senior officials alleged to have violated Regulation FD.
SEC v. Christopher A. Black represented a departure from the (then) norm due to the fact that the
SEC brought an enforcement action against only the senior official who had allegedly violated
Regulation FD and not also against the company. Among the several factors the SEC indicated that
it considered determinative in deciding not to bring an enforcement action against the company, the
company “cultivated an environment of compliance” by, among other things, adopting policies that
implemented controls to prevent violations.
And notably, among the several factors the SEC identified as the basis for its decision not to bring
an action against First Solar in connection with its September 6, 2013 cease-and-desist order
(Release No. 70337) issued against the company’s former head of investor relations were the
company’s cultivation of an environment of compliance through the use of a disclosure committee
that focused on Regulation FD compliance and its undertaking of remedial measures including
providing Regulation FD training to all employees.
In 2018, the SEC charged Elon Musk, CEO of Tesla, with violating 10b-5 anti-fraud rules when
he made a tweet about taking Tesla private. The SEC didn’t charge Elon Musk or Tesla with
violating Regulation FD—which may be due to the fact that Tesla filed an 8-K in 2013 noting that
Musk’s Twitter account may be used as a dissemination method. However, the SEC pointed out
in its settlement with Elon Musk that despite this Form 8-K, social media posts need to also go
through adequate disclosure controls and procedures if the social media platform will be used to
communicate with investors.
In 2019, the SEC brought a Regulation FD enforcement case against TherapeuticsMD, Inc. based
on its sharing of material, nonpublic information with sell-side analysts without also disclosing the
same information to the public. The case involved pretty clear “selective disclosure” violations of
Regulation FD on two occasions. The case also involved egregious conduct by TherapeuticsMD,
including the fact that the company didn’t have policies or procedures for compliance with
Regulation FD. The company was ordered to cease and desist from future violations of Regulation
FD and agreed to pay a $200,000 penalty.
In 2020, Kodak was subject to an SEC investigation in connection with an announcement of

a $765 million government loan to make COVID-19 pharmaceuticals at its US factories. The
company sent a news advisory to media outlets without any embargo instructions a day before

the company’s official announcement. The board formed a special committee to investigate the
events and retained an outside law firm to prepare a report about the findings of the investigation.
The law firm concluded that the company, and its officers, directors and senior management didn’t
violate securities regulations or other relevant laws, breach their fiduciary duties, or violate any of
the internal policies or procedures. Even so, the report contains several corporate governance and
procedural recommendations.
In terms of the process that Kodak followed with respect to the release of information, the report
acknowledged there was room for improvement—and identified several deficiencies that companies
may want to consider with respect to their own policies and processes. In particular, counsel to the
special committee found the following deficiencies, all items that emphasize the importance of a
strong Regulation FD policy:
– A lack of training for the company’s personnel who were dealing with the media,
– A lack of clear policies and procedures regarding processes that must be followed
before a press release or media advisory can be revised or circulated to parties
outside of the company,
– a general lack of sensitivity among certain company employees regarding the need
to carefully control the release of potentially MNPI regarding the company due to its
status as a publicly traded company, and
– a lack of robust coordination with the legal department regarding outreach to the
media leading up to and after the DFC Announcement.
Among other recommendations, the report urged the company to review and update its policies and
procedures regarding the release of potentially MNPI and ensure that its public relations department
is properly staffed and trained with respect to the appropriate protocols and best practices for
handling interactions with the media on behalf of a public company. It also recommended that
management ensure that the legal department has sufficient and appropriate resources.
Reg FD Policy Considerations
Reg FD policies differ in scope; there is no “one size fits all” policy. A well-drafted external
communications policy should enable a company to timely consider alternative means of
disclosure, develop consistent disclosure practices, reduce the likelihood of inadvertent disclosures
and enable officers to say “no” to requests for information that the company does not wish to
disclose publicly.
A company’s communications policy should be realistic and reflect achievable behavior, not lofty
goals that cannot be met with a high degree of certainty. The violation by a company of its own
policy can exacerbate an already difficult situation. See SEC v. Flowserve, SEC Lit. Rel. No. 19154
(Mar. 24, 2005).

Regulation FD 4-85
Although there’s a lot of overlap between Reg FD policies and insider trading & confidentiality
policies, we typically see companies maintain their Reg FD policies on a separate, standalone
basis. For examples of combined policies, check out Zix Corporation & Capital Senior Living
Corporation.
The following topics are among those that should be considered for potential inclusion in an exter-
nal communications policy:
– Explicit prohibition of selective disclosure in violation of Regulation FD
– Designation of company spokespersons principally responsible for communications with

the securities market participants enumerated in Rule 100(b)(1) of Regulation FD
– Referral of inquiries received by other employees from the securities market participants to
the designated company spokespersons
– Designation of a “disclosure team” or other group responsible for external disclosures

(typically consisting of legal counsel, the CFO and other financial reporting and investor
relations and communications personnel)
– Designation of those responsible for making threshold determinations of materiality
– Procedures/processes relating to public disclosure of material information
– Policy for addressing rumors about the company, including a “no comment” policy restrict-
ing responses to inquiries about rumors
– Establishment of procedures to address inadvertent selective disclosures
– Documentation/record-keeping requirements
– Reiteration of company confidentiality policy
– Identification of the person(s) responsible for administering and directing compliance with
the policy
Sample policies are posted in our “Regulation FD” Practice Area on TheCorporateCounsel.net.
Review Stock Exchange Standards When Drafting Policy
Stock exchanges share Regulation FD’s goal of maintaining orderly markets and discouraging
selective disclosure. So they also have rules about how and when to disclose information—and
listed companies should review those rules when adopting or updating their disclosure policies.
Section 202.01 of the NYSE Listed Company Manual highlights this:
The Exchange suggests that a periodic review be made by each company of

the manner in which confidential information is being handled within its own

organization. A reminder notice of the company’s policy to those in sensitive areas

might also be helpful.
A sound corporate disclosure policy is essential to the maintenance of a fair and

orderly securities market. It should minimize the occasions where the Exchange
finds it necessary to temporarily halt trading in a security due to information leaks or
rumors in connection with significant corporate transactions.
NYSE rules also address what to do when sensitive information is evolving—and the suggestions
are useful even for companies not listed on that exchange:
– During preliminary discussions, be extremely careful to keep information confidential
– Confine discussions for as long as possible to a small group
– Watch the market for unusual activity—and be prepared to immediately announce if

necessary
– Recognize that it’s nearly impossible to maintain confidentiality once the matter is disclosed
to lenders, large shareholders, etc.—and make a public announcement at that time
– Tailor the extent of your disclosure to the stage of discussions—but include definite price,
ratio, timing and other pertinent information if possible
– Supplement your disclosure as the matter develops
When it comes to discussions with analysts, the NYSE recommends that companies observe an
“open door” policy—but should not selectively disclose information or share information that
hasn’t been publicly announced. Section 202.02 of the NYSE aligns closely with Regulation FD
and says that giving advance information to individuals who represent an institution, brokerage
house, investment advisor, large shareholder, or anyone else is a clear violation of NYSE policy.
Designate Limited Number of Authorized Spokespersons
The core of an effective external communications or Regulation FD policy is the monitoring and
control of the flow of information within and from the company. Therefore, companies should
consider (i) substantially limiting the number of persons authorized to speak publicly on behalf of
the company and make disclosures to or respond to inquiries from securities market participants—
and specifically identifying these persons (by position, e.g., CEO, the CFO and one or more
members of the board of directors, as well as the person or persons involved in investor relations
and public relations) in their Regulation FD policies and (ii) precluding communications by other
officers, directors or employees about the company with any of the securities market participants
enumerated in Regulation FD (exclusive of ordinary course communications with, e.g., customers
and suppliers who also happen to be security holders).

Regulation FD 4-87
Depending on the company’s structure and circumstances, the company’s policy may also provide
that designated spokespersons have the authority to designate “temporary” spokespersons, such as
division or unit heads who are asked to participate in, e.g., a particular investor conference call or
other presentation, or a particular transaction with confidentiality protection.
Ideally, the number of spokespersons identified should be as few as possible. The SEC does not
effectively resolves any uncertainty regarding who is covered by Regulation FD. In footnote
44 of the Regulation FD adopting release, the SEC referred to its proposing release wherein it
suggested that companies designate a limited number of authorized spokespersons as one means
to mitigate concerns that the general materiality standard in Regulation FD would lead to litigation
and a chilling effect on corporate disclosures. Limiting the number of spokespersons increases
the likelihood that public statements are made only by those persons who have access to the best
and most current information about the company and also should facilitate training efforts and
consistency in the company’s communications.
Note also that the company is not liable under Regulation FD if an unauthorized person selectively
discloses material nonpublic information to a securities market participant in breach of his/her
duty of trust or confidence. In the Regulation FD adopting release, the SEC specifically noted that
the definition of “person acting on behalf of the issuer” for purposes of Rule 100(a) of Regulation
FD expressly states that a person who communicates material nonpublic information in breach of
a duty of trust or confidence to the company will not be considered to be acting on behalf of the
issuer (noting in the accompanying footnote 37 that, in such a case, the person may be liable for
insider trading).
And in Regulation FD CDI 101.10, the SEC Staff stated that if an issuer has a policy that limits
which senior officials are authorized to speak to the securities market participants enumerated in
Rule 100(b)(1) of Regulation FD, disclosures by senior officials not authorized to speak under the pol-
icy are not covered by Regulation FD; rather, such selective disclosures are made in breach of a duty
of trust or confidence to the issuer and may trigger their liability under existing insider trading law.
Implement Policies Addressing Director Communications With Investors
Increasingly, concerns have been expressed as to whether greater director engagement with
shareholders, a trend triggered by corporate governance concerns, could raise the risks for Regu-
lation FD violations.
In Regulation FD CDI 101.11, the SEC Staff indicated that companies whose directors are
authorized spokespersons and plan to speak privately with shareholders should consider
implementing policies and procedures to help avoid Regulation FD violations, such as pre-
clearing topics to be discussed with the shareholder, having the company’s counsel participate
in the meeting or obtaining an express agreement from the shareholder to maintain the disclosed
information in confidence (in accordance with Rule 100(b)(2)(ii)). This same guidance would apply
to directors’ communications with other covered securities market participants such as analysts.

Presentations to Market Participants Should Be Subject to Pre-Approval
A Regulation FD policy should provide that pre-approval is required for any presentations
to investors and analysts (as well as any other securities market professionals enumerated in
Regulation FD), no matter what the forum, and that the content of any such presentations be
approved by a designated officer or team which, in certain cases, may include the audit committee
chair. In addition, requests for information, comments or interviews made to officers, directors or
employees should be presented to a designated officer or team, subject to some limited exceptions
for ordinary-course business-related communications.
Keep in mind that Regulation FD also hasn’t caused the death of investor “one-on-ones.” They
remain common—and investors aren’t sticking to mundane questions. They might be asking about
current cash balances, product delays and even the status of earnings guidance. These meetings are
a compliance minefield—that’s why it’s important to pre-approve presentations and talking points
and stick to them.
In addition, investor presentations—whether public or private—need to align with the tone of

recent public statements. Inconsistencies will lead to probing questions from investors—and might
impact the stock price or management’s credibility. Neither of these scenarios are good. Even
when Regulation FD provides legal cover at a properly noticed and webcast meeting, that doesn’t
mean it’s the right way to get the word out.
Pre-Approve Presentations Even If Not “Typical” Analyst Meeting
Review and pre-approval of presentations may also be necessary in situations beyond the typical
analyst presentations that are often viewed as creating the most significant risks from a Regulation
FD perspective. For example, when presentations (outside of ordinary-course business-related
communications) are made to groups such as customers, vendors, distributors, etc., those parties
may also be investors in the company; therefore, subject to the ordinary course business-related
communications “exception”, the potential for Regulation FD violations could arise. For this
reason, it is important that the company’s legal counsel be aware of all upcoming presentations so
that the potential for Regulation FD exposure can be evaluated.
Address Communications with Analysts & Review of Analyst Reports
An effective Regulation FD policy should provide that earnings guidance is not to be provided to
analysts unless the guidance is provided strictly in accordance with the company’s Regulation FD
policy. To avoid potential entanglement or adoption theory liability, the policy should also specify
that, in general, consistent with NYSE Rule 472 and NASD Rule 2711, the company should not
review analyst reports, and that any review actually undertaken by the company or persons acting
on its behalf should be limited to historical items and similar factual matters.
Under the entanglement theory, a company can be liable for inaccuracies in an analyst’s research
report if it sufficiently entangles itself with such information so as to render the statements
attributable to the company. Under the adoption theory, a company can be liable for false

Regulation FD 4-89
statements contained in an analyst’s report if it expressly or impliedly adopts the statements after
they are published (even if management had no role in preparing the reports) by suggesting that the
analyst’s forecasts are accurate, or at least consistent with the company’s views.
The Regulation FD policy should also make clear that any confirmations or updates to previously
disclosed guidance or other material non-public information should be made only through the
procedures set forth in the policy. The company should consider whether a strict “no comment”
policy should be adopted for requests from analysts or investors to update guidance or to affirm
guidance. To the extent the company does not adopt a strict “no comment” policy, then the
company and its counsel should carefully consider how such updates are to occur and what
specifically will be communicated in the update.
Address “Quiet Period” Procedures
Companies take different approaches to “quiet periods”—the period prior to the release of
financial statements when you’d typically refrain from communicating with investors & analysts.
Designating a reasonable quiet period—usually a couple weeks—can reduce the risk of Regulation
FD violations because management won’t feel obligated to talk to investors at a time when the
company is likely to have earnings results or other material non-public information.
The key is to be consistent about your duration and other quiet period practices. Investors are more
understanding of getting their questions deferred—and less jumpy—if you can point to a quiet
period policy and/or consistent practice. And while a quiet period doesn’t mean you have to go
completely silent—some companies still speak with shareholders, but avoid discussing quarterly
results—it’s typically helpful for the investor relations team to avoid scheduling investor calls or
making significant announcements during this time.
Your Regulation FD quiet period may—or may not—align with your “blackout” period under
your insider trading policy. In an informal survey conducted by TheCorporateCounsel.net in 2017,
34% of companies said that their policies had the exact same parameters; 28% of companies said
that their FD quiet period is shorter than their insider trading blackout period; 25% of companies
said that their FD quiet period starts later than their insider trading blackout period; and 6% of
companies said that their FD quiet period starts earlier and lasts longer than their insider trading
blackout period. Most companies do designate quiet periods and it’s common for quiet periods to
begin two weeks before quarter end.
Address Social Media in Reg FD Policy
The proliferation of social media, including blogs, Twitter, Facebook, LinkedIn and other similar
outlets, raises particular Regulation FD concerns. The SEC’s 2008 interpretive guidance on the use
of company websites makes clear that corporate blog postings will be analyzed in the same way
as other website postings for purposes of Regulation FD compliance. And the SEC’s April 2013
Section 21(a) report of investigation concerning Netflix affirmed that the framework and principles
outlined in that guidance apply equally to company disclosures made via social media.

Given the deliberate (so as to accommodate future advances in technology) principles-based rather
than fact-based compliance standards contained in the SEC’s 2008 guidance, not surprisingly,
few companies to date have indicated an intent to rely solely upon website disclosure (let alone
social media disclosure) for Regulation FD purposes. In the absence of bright-line standards and
precedent, it is suggested that companies do so only after thorough evaluation of their facts and
circumstances in consultation with counsel with expertise in this area.
Nevertheless, due to its pervasiveness, companies should consider specifically addressing the
use of social media in their Regulation FD policies, including whether prohibitions, restrictions
or editorial oversight should be implemented to govern the use of social media by designated
authorized spokespersons. This remains an evolving area that must be continually monitored, as the
methods for interacting with shareholders, analysts and others are rapidly changing. Legal teams
should also coordinate with marketing and other departments for the company’s social media usage.
Address “Materiality” in FD Policy
Although your Regulation FD Policy should designate the people responsible for making
materiality determinations, it should also give all employees an idea of what type of information is
“material.”
Most policies give a non-exclusive list of examples of material information—certainly including

all of the matters enumerated in the SEC’s Regulation FD adopting release, and typically also
cybersecurity risks and incidents and other industry- or company-specific examples. The list
of examples is usually very similar to the one included in the company’s insider trading policy.
Both policies should be clear that other information could also be “material,” depending on the
circumstances.
Monitor Market Activity & Rumors on Ongoing Basis
Given the obligation under Regulation FD to promptly publicly disclose material information that
may have been inadvertently selectively disclosed, the company’s Regulation FD policy should
specifically contemplate procedures that can be implemented to monitor for unusual trading activity
in the company’s securities, analyst and investor communications and market rumors to determine
if any corrective disclosure is necessary.
The company’s policies and procedures should address the potential occurrence of non-intentional
selective disclosures and the means for quickly determining whether prompt public disclosure of
such information is required under Regulation FD and the need for any additional actions under the
securities laws, exchange listing rules or otherwise.
Educate All Employees—Not Just Senior Officials
It’s important to educate all employees about Regulation FD and to specifically require
unauthorized employees (i.e., employees who are not authorized spokespersons) who receive

Regulation FD 4-91
inquiries from analysts, investors and other securities market participants enumerated by Regulation
FD to make referrals to the company’s designated authorized spokespersons and prohibit their
communications with securities market participants.
While communications by unauthorized employees in breach of their duty of trust or confidence

don’t subject the company to liability under Regulation FD, circumstances still may trigger an
obligation on the part of the company to make an undesirable public disclosure if, for example,
information on pending developments has leaked out. Most (if not all) companies have policies
that prohibit employees from sharing company information with third parties except in the ordinary
course of business. The Regulation FD policy should reiterate this policy—reminding employees of
the importance of maintaining the confidentiality of company information and their obligations to
do so, as well as their exposure to potential liability for insider trading.
Implement Regular Reg FD Training
As is the case with a company’s insider trading policy, it is critical that the company’s Regulation
FD policy be adequately communicated to officers, directors, and employees, and that those
individuals understand the application of the policy and the potential consequences for
noncompliance. We’ve seen studies that investor relations officers consider private phone calls to
be more important than 10-K/10-Q reports, on-site visits, and management guidance for conveying
their company’s message—and more than 80% conduct private “call-backs” with sell-side
analysts and institutional investors after earnings calls. So it’s really important for these officers to
understand how Regulation FD works and what the consequences are to them and the company if
there’s a violation.
Appropriate implementation of the Regulation FD policy is likely to include regular training

regarding the policy, the inclusion of the policy in relevant procedures manuals, and periodic
reviews and updates regarding the policy so that the officers, directors and employees are fully
aware of the scope of the policy and will be sensitive to reporting any potential violations or
concerns to the proper person(s) identified in the policy.
The SEC indicated in footnote 90 of the Regulation FD adopting release that implementation
and adherence to an appropriate policy may often be relevant in determining whether a selective
disclosure was intentional. And recent case law and SEC enforcement actions certainly suggest that
the SEC will take into account employee training and adoption and implementation of a formal
Regulation FD policy in assessing a company’s liability for its employees’ misconduct.
In well-publicized cases prior to SEC v. Christopher A. Black, Case No. 09-CV-0128 (S.D. Ind.,
September 24, 2009) (e.g., Schering-Plough, Flowserve, and Siebel II), the SEC had filed suit
against both the company and its senior officials alleged to have violated Regulation FD. SEC v.
Christopher A. Black represented a departure from the (then) norm due to the fact that the SEC
brought an enforcement action against only the senior official who had allegedly violated Regulation
FD and not also against the company. Among the several factors the SEC indicated that it considered
determinative in deciding not to bring an enforcement action against the company, the company
“cultivated an environment of compliance” by, among other things, providing training regarding the

requirements of Regulation FD to the officer responsible for the Regulation FD violation and other
company employees.
And notably, among the several factors the SEC identified as the basis for its decision not to bring
an action against First Solar in connection with its September 6, 2013 cease-and-desist order
(Release No. 70337) issued against the company’s former head of investor relations were the
company’s cultivation of an environment of compliance through the use of a disclosure committee
that focused on Regulation FD compliance and its undertaking of remedial measures including
providing Regulation FD training to all employees.
IV. Common Questions & Our Analysis
a. Understanding the Basics
1. Identify Authorized Spokespersons
Question: Should companies specifically identify which employees and officials are authorized to
make disclosures to or field inquiries from securities market participants?
Answer: Yes. Companies should specifically identify, in writing, which persons are authorized to
make disclosures to or respond to inquiries from securities market participants. The SEC does not
effectively resolves any uncertainty regarding who is covered by Regulation FD.
Ideally, the number of spokespersons identified should be as few as possible. Companies should
prohibit non-designated employees from engaging in discussions with securities market participants
and instruct such employees to refer inquiries to authorized spokespersons—this can be set out in a
Regulation FD policy document.
A company is not liable under Regulation FD if an unauthorized person selectively discloses

material nonpublic information to a securities market participant in breach of its duty of trust
or confidence. Therefore, a company is not responsible when one of its employees or officials
improperly trades or tips; however, the employee or official could be liable for insider trading.
2. Require Unauthorized Employees to Refer Inquiries to Spokespersons
Question: Should companies specifically require employees who are not authorized to
communicate with securities market participants (e.g., investors and analysts) to refer inquiries
from market participants to the company’s authorized spokespersons?
Answer: Yes. Companies should specifically require unauthorized employees who receive
inquiries to make referrals to the company’s authorized spokespersons. Companies can protect
themselves by specifically requiring such referrals and prohibiting unauthorized employees from
communicating with analysts and other securities market participants in a written company policy.

Regulation FD 4-93
Implementation and communication of a written company policy that addresses these matters
ensure that employees are informed as to the law and understand how to handle these potential
occurrences, and enable the company to take disciplinary action for non-compliance. Such
measures also bolster the argument that the company is not liable under Regulation FD for
communications by these employees that violate the policy. Communications by unauthorized
employees in breach of their duty of trust or confidence don’t subject the company to liability under
Regulation FD.
3. Disclosure to Government Not Subject to Reg FD (But Still May Warrant Public Disclosure)
Question: If an issuer’s wholly-owned subsidiary, which happens to be an insurance company,

files a quarterly report with the State Department of Insurance that discloses material, nonpublic
information regarding the issuer before the issuer files its quarterly report on Form 10-Q, what, if
any, public disclosure needs to be made by the issuer and when must such disclosure be made?
Answer: Providing the information to the state agency isn’t a Regulation FD problem because the
agency isn’t a covered recipient under Rule 100(b)(1) of Regulation FD. However, if the public
can access the information that the company files with the agency, practically speaking, companies
don’t want material information revealed without managing its release, so companies tend to make
the information public at the same time. A Form 8-K seems like the best vehicle to accomplish this
if a Form 10-Q or Form 10-K isn’t being filed.
If the submission to the state agency isn’t publicly accessible, then there is no need to consider
voluntary, concurrent public disclosure.
4. Disclosure to Independent Contractors Permissible
Question: Can a company disclose material non-public information to its independent contractors
(who may also be shareholders) with whom the company deals regularly in the ordinary course of
business without making public disclosure of the information?
Answer: A company may ordinarily disclose material non-public information to its independent
contractors (who may also be shareholders) without making public disclosure of the information.
Regulation FD applies only to disclosures made to the categories of persons outside the issuer
enumerated in Rule 100(b)(1)—i.e., predominantly those characterized as securities market
professionals, and investors in those circumstances where it is reasonably foreseeable that they
would trade on the basis of the information.
However, this presumption pertains only to ordinary-course business-related communications

with these individuals. If a communication does not fall into that category and is material and
nonpublic, a company should protect itself by having the recipient of the information enter into a
confidentiality agreement that comports with the requirements of Regulation FD.

5. Form 15 Filer Subject to Regulation FD
Question: Must an issuer who has filed a Form 15 that has not yet become effective (i.e., 90 days
have not elapsed since the filing) comply with Regulation FD?
Answer: Yes. An issuer is defined in Rule 101(b) of Regulation FD as “one that has a class of
securities registered under Section 12” of the Exchange Act or “is required to file reports under
Section 15(d)” of the Exchange Act.” Rule 12g-4(b) states only that an issuer’s duty to file reports
under Section 13(a) is suspended upon filing a Form 15. Therefore, other obligations continue,
including, e.g., compliance with the proxy rules and Regulation FD.
6. Investment Banker Exception Applies Once Banker Engaged
Question: Rule 100(b)(2)(i) of Regulation FD excludes from the scope of Regulation FD

disclosures that are made to a person who owes a duty of trust or confidence to the issuer (such as
an investment banker). Does the “investment banker” need to be formally engaged by the issuer in
order to avail itself of this exemption? As an example, if the issuer engages a placement agent, and
the placement agent then reaches out to broker dealers to help sell securities of the issuer, would
such broker dealers fall under the Rule 100(b)(2)(i) exemption?
Answer: Based on this scenario, they would not be exempt under Rule 100(b)(2)(i). They would be
receiving material non-public information without any obligation to sell for the company and they
could, potentially, turn around and use that information to buy or sell stock of the company. A more
concrete relationship would need to be established in order for a duty of trust or confidence to arise.
We don’t think it works to say that the downstream brokers would owe the same duties of trust or
confidence as the placement agent.
It may be possible for the issuer to avail itself of the exemption set forth in Rule 100(b)(2)(ii) by seeking
to obtain an express agreement on the part of the brokers to maintain the information in confidence.
7. Reg FD Applies to Communications with ISS
Question: Does Regulation FD apply to communications with Institutional Shareholder Services

(ISS)? It is not a shareholder but is of course an advisory firm that issues recommendations
regarding how shareholders should vote.
Answer: ISS is an investment adviser, which is one of the enumerated categories of persons
covered under Rule 100(b)(1) of Regulation FD. In Section II.B.1.a of the Regulation FD adopting
release, the SEC discussed that it specifically narrowed the coverage of Regulation FD to categories
of persons that would reasonably be expected to trade securities on the basis of the information
communicated or provide others with advice about securities trading.
Therefore, disclosures of material nonpublic information to ISS would be subject to Regulation

FD. However, to the extent information disclosed is material (which is often not the case for
information communicated in these circumstances), such communications would typically be made

Regulation FD 4-95
on a confidential basis—i.e., ISS would expressly agree to maintain the disclosed information in
confidence, thus falling within the exclusion to coverage set forth in Rule 100(b)(2)(ii).
The SEC made clear in footnote 28 of the Regulation FD adopting release that although
confidentiality agreements must be express, they need not be in writing. Oral agreements will
satisfy the exclusion, as will agreements obtained after the fact (i.e., after the disclosure is made)
but before the recipient discloses, or trades on the basis of, the information.
Glass Lewis, another major proxy advisory firm, is not a registered investment advisor. However,
given its scope of services and activities (which are fairly comparable to ISS)—like ISS—we
would advise that material nonpublic information be shared with them only on a confidential basis.
8. Confidentiality Agreement Can Be Oral
Question: Does the confidentiality agreement need to be in writing in order to satisfy the exclusion
set forth in the rule?
Answer: No. Although the agreement to maintain confidentiality must be express, it does not need to
be in writing, nor does the agreement need to be obtained before the communication is made. The SEC
specifically indicated that an oral agreement is sufficient, and that the agreement may be obtained after
the disclosure is made but before the recipient discloses or trades on the basis of the information.
The SEC’s assurances notwithstanding, whenever feasible and appropriate, a written agreement
obtained in advance of disclosure is preferable. A company is better able to prove that another
party agreed to keep the information confidential if there is a written document. In addition, a
written agreement obtained in advance can better define and ensure that there is a meeting of the
minds regarding the scope of permitted uses of the information, which reduces the likelihood of
subsequent disputes.
On the other hand, there are certain instances (e.g., in the context of preliminary merger
discussions) where material nonpublic information is often exchanged before written confidentiality
agreements are executed. In those instances, the ability to use oral express agreements under
Regulation FD is important to avoid triggering a duty to publicly disclose information prematurely.
b. Material & Nonpublic Information
1. May Disclose Non-Material Information to Analysts That Completes Mosaic
Question: Is information considered material under Regulation FD if it is itself immaterial but is

significant to an analyst in the context of other public information known to the analyst (i.e. it fills
in the last piece of a “mosaic” of information that is material as a whole)?
Answer: No. The SEC stated in the Regulation FD adopting release and reiterated in Regulation
FD CDI 101.03 that a company is not prohibited from disclosing immaterial information to
an analyst even if, “unbeknownst to the issuer,” that information helps the analyst complete

a “mosaic” of information that, taken together, is material. However, while the company can
knowingly communicate immaterial information to an analyst, the SEC made clear that a company
can’t escape liability under Regulation FD by deliberately breaking material information into and
then selectively communicating seemingly non-material pieces to an analyst.
The mosaic theory highlights that what counts is whether the information is material to a
“reasonable investor,” not whether it is material to a more knowledgeable or skilled securities
market participant such as an analyst.
2. Private Discussions with Market Participants About Earnings Are Risky
Question: Can a company discuss earnings privately without the information being considered
“material”?
Answer: A company should assume that it cannot discuss earnings information (e.g., reports or
projections/forecasts) privately with securities market participants without the earnings information
being considered “material” and the private communications thus constituting a violation of
Regulation FD absent application of one of the exclusions set forth in the rule. In fact, Regulation
FD was enacted primarily to stop this practice. In the Regulation FD adopting release, the SEC
came close to stating that discussions with analysts regarding earnings are always material by
stating, “When an issuer official engages in a private discussion with an analyst who is seeking
guidance about earnings estimates, he or she takes on a high degree of risk under Regulation FD.”
A person authorized to speak for a company likely violates Regulation FD if they privately inform
an analyst that anticipated earnings will be higher, lower, or even the same as predicted, regardless of
whether the information is conveyed explicitly or implicitly (e.g., obvious body language or speaking
in “code”). The SEC has demonstrated that it will not hesitate to bring actions against companies that
privately correct publicly disclosed information by speaking directly to analysts or by urging analysts
to correct their projections. The only broadly recognized “safe” exception is a private reaffirmation
that the company believes its estimates are the same just after a public statement to that effect.
However, this exception does not mean that a company can use subsequent selective
communications to any way clarify or correct prior public disclosures that the company realizes
may have been understood or perceived in a manner other than as intended. See, for example,
the SEC’s Report of Investigation in the Motorola case (Report of Investigation Pursuant to
Section 21(a) of the Securities Exchange Act of 1934: Motorola, Release No. 34-46898 (Nov. 25,
2002)), where the SEC stated that “[a]fter-the-fact private communications of material, nonpublic
information to securities professionals are not a proper way to supplement a prior public disclosure
that the issuer determines to have been misunderstood or misinterpreted.”
3. Correcting Analyst Perceptions After Earnings Release Likely Violates Reg FD
Question: After a company’s earnings call and earnings release wherein the company provides
guidance, the company observes that analysts’ forecasts are materially more optimistic. Would it
violate Regulation FD if the company were to reach out to the analysts to “walk them down” even

Regulation FD 4-97
if the information that the company would provide would be fully consistent and not new from
what the company previously disclosed? In these circumstances, have you seen companies issue a
press release confirming the recently issued guidance and perhaps providing some additional color
underlying the guidance? Or would you advise the company to do nothing?
Answer: At the root of a number of the handful of Regulation FD cases that the SEC has brought
over the years has been the good-hearted notion of trying to “correct” some misguided notion of
the Street, or in other words, walking the analysts down (or up as the case may be). Based on the
presumptive materiality of earnings information, we agree that it is virtually inconceivable to do
this in a way that doesn’t risk a potential Regulation FD violation.
While private confirmations of previously publicly disclosed earnings guidance can be made
without triggering Regulation FD’s public disclosure requirements in certain circumstances, you
should assume that the company can’t discuss earnings guidance privately with analysts without
the information being considered “material” and the private communications thus constituting a
violation of Regulation FD absent application of one of the exclusions set forth in the rule. In CDI
101.01, the SEC Staff addresses the factors companies should consider in determining whether a
selective confirmation of a previously publicly made forecast would be deemed material and thus a
violation of Regulation FD.
The first thing we would do when presented with this situation is to conduct an internal inquiry
to attempt to determine the trigger for the analysts’ rosy outlook. Was it something that someone
from the company said in a call, in one-on-one meetings or even an unauthorized communication?
If something turns up on this front, then we would suggest you review the SEC’s action in the
October 2009 SEC v Christopher A. Black case for guidance on how to effectively deal with the
situation from the company’s perspective.
Assuming nothing turns up in this inquiry, then there is nothing that would prevent the company
from reaffirming guidance and providing additional color in a Regulation FD and anti-fraud
compliant manner. There is no guarantee that this approach will convince the analysts to change
their views, however, and the market may perceive this out of cycle guidance (and additional color)
as potentially negative news if it is happening shortly after the earnings release/call. Depending
on the circumstances and timing, the company might also consider providing some additional
information in its upcoming Form 10-Q/K to try to better explain the outlook and trends that are
impacting results.
4. Look to Stock Price Movement as Materiality Indicator
Question: Is information material if it significantly impacts a company’s stock price?
Answer: Information is more likely than not material if it significantly impacts a company’s
stock price. Even though the legal definition of “materiality” does not directly address stock price
movement, such movement is one of the clearest indicators of reasonable investors’ views as to the
significance of the information, and SEC Regulation FD enforcement actions have demonstrated

that the SEC will look to market reaction (e.g., significant movements in stock trading price and
volume) as an indicator (albeit, not determinative) of materiality.
Regulation FD’s definition of materiality is tied to what a reasonable investor would consider
important in making an investment decision. The problem is that it is impossible to know how
stock price will be impacted or how the market will react to information that a company reasonably
believes is immaterial.
In the text of Staff Accounting Bulletin (SAB) No. 99 and accompanying footnotes, the SEC Staff
discussed the fact that actual stock price movements by themselves should not determine but may
provide guidance as to materiality, and that expected significant market reaction should be taken
into account when considering the materiality of known misstatements. While it is unclear whether
or how the SEC intended that SAB No. 99, which the SEC cited in a footnote regarding materiality
in the Regulation FD adopting release without further explanation, apply beyond the scope of
financial statements in the Regulation FD context, many legal practitioners interpret the SEC’s
notation to mean that companies should take SAB No. 99 into account when assessing materiality
of information for Regulation FD purposes by considering both qualitative and quantitative factors.
This interpretation makes sense in the context of the balance of the SEC’s discussion of materiality
in the Regulation FD adopting release.
5. No Duty to Disclose Based on Mere Possession of Material Nonpublic Information
Question: Does Regulation FD require companies to publicly disclose their material developments
as they occur?
Answer: Regulation FD does not alter longstanding principles about when companies have a duty
to disclose. As before Regulation FD, companies ordinarily have a duty to disclose material non-
public information only:
– If they trade, or their insiders trade, on confidential information;
– If they made inaccurate, incomplete or misleading disclosures; or
– When statutes or regulations otherwise require.
disclosure of material information that would reasonably be expected to affect the value of the
listed company’s securities, and Rule 5250 of the Nasdaq Listing Rules requires that there be
prompt disclosure of material information that would reasonably be expected to affect the value of
the listed company’s securities or influence investors’ decisions.
6. Prepare to Make Real-Time Materiality Determinations
Question: How should companies prepare to make a materiality evaluation?
Answer: To make materiality judgments on the real-time basis that Regulation FD requires,
although not required under the rule, if it has not already done so, the company should consider

Regulation FD 4-99
creating a disclosure team or designating another group of company representatives responsible

on an ongoing basis for making these determinations in order to enhance the efficiency and
consistency of the company’s decision-making. (Note, however, that the SEC did recommend that
issuers create a committee with responsibility for considering the materiality of information and
determining disclosure obligations on a timely basis in connection with its rules implementing
Sarbanes-Oxley Section 302 regarding CEO and CFO certifications.) This is one means to conduct
and demonstrate the performance of a carefully considered evaluation based on the particular
facts and circumstances. (See Report of Investigation Pursuant to Section 21(a) of the Securities
Exchange Act of 1934: Motorola, Release No. 34-46898 (Nov. 25, 2002), where the SEC indicated
that it encourages (and in that case gave Motorola credit for) “honest, carefully considered attempts
to comply with Regulation FD.”)
The disclosure team or other designated company representatives should be fully knowledgeable about:
– The company;
– The company’s prior public statements;
– What analysts have communicated about the company;
– What journalists have communicated about the company;
– What analysts and journalists have communicated about the company’s industry and com-
petitors; and
– What Regulation FD requires.
The investor relations officer or other designated official(s) should also track the trends of
how companies and the SEC are treating differing types of disclosures, monitor how different
types of disclosures impact the company’s stock price (as a factor to consider in evaluating
future materiality determinations), and maintain comprehensive binders of all corporate
communications—ranging from press releases to SEC filings—as a reference tool to determine
what information has been made public.
7. Team Composition for Materiality Evaluations
Question: For those companies designating a disclosure team or group of representatives to handle
materiality evaluations on a regular basis, which employees typically make up the company team?
Answer: For Regulation FD purposes, most companies rely on a combination of their legal,
investor relations, corporate communications, and finance department personnel to manage their
disclosure process. Outside securities counsel should also be consulted if necessary or appropriate.
Regulation FD warrants more coordination between and among departments and a more formal
review process for any potentially material information than may have been the case historically.

8. Evaluating Materiality of Non-Intentional Disclosures
Question: What is the process of determining whether a company’s non-intentional disclosure is

material?
Answer: It varies depending on the disclosure practices of the company, but a process should
be pre-established to quickly handle non-intentional, potentially material selective disclosures
for Regulation FD purposes. To make the determination timely, ideally, a company should
consider having a “SWAT” team—which may or may not be its disclosure team—that makes
spokesperson in conjunction with inside and/or outside counsel).
Evaluating materiality can be difficult. If it is not an “easy” case, companies should consider,
among other potentially relevant factors, the following:
– How the stock market and the media reacted to the information (if applicable);
– What the company has already disclosed about the inadvertently selectively disclosed
matter (e.g., whether the selectively disclosed information is just an insignificant detail of
a previously publicly disclosed matter or an incomplete piece of a matter not previously
publicly disclosed);
– Whether the company has typically disclosed similar information in the past; and
– Potential harm of broad distribution at the time.
Note that express confidentiality agreements may be obtained from recipients of information after a
selective disclosure has been made to address an inadvertent selective disclosure, provided that the
recipients have not disclosed the information or traded the company’s securities prior to agreeing to
maintain the information in confidence. The SEC specifically noted in footnote 28 of the Regulation
FD adopting release that the company may try to avoid any harm resulting from a non-intentional
selective disclosure in this manner.
9. How to Detect & React to Potentially Mistaken Materiality Judgments
Question: What should companies do if they make a mistake about the materiality of a disclosure?
Answer: SEC enforcement actions have demonstrated that the SEC will look to market reaction
(e.g., significant movements in stock trading price and volume) as an indicator (albeit, not
determinative) of materiality. If a company makes a selective disclosure that it believes is
immaterial, but the market reaction suggests otherwise because the stock price moves significantly,
the company should consider promptly issuing a Regulation FD-compliant press release pursuant
to the rule’s non-intentional selective disclosure requirements and ensure that it has documented the
reasons why it originally decided the information was immaterial.

Regulation FD 4-101
10. Reg FD Impact on Compensation Plan Disclosure
Question: Is there any problem with an issuer approaching certain of its institutional investors prior
to filing its proxy statement to discuss a proposed compensation plan proposal? The issuer would
like to provide a preliminary draft of the proposal and obtain institutional investors’ comments
before preparing its proxy statement.
Answer: There may be Regulation FD issues if, for example, the proposed compensation
arrangements include material nonpublic information (e.g., earnings targets). Theoretically,
Regulation FD concerns could be addressed by obtaining express confidentiality agreements from
these investors; however, realistically, most institutional investors probably would not want to
enter into confidentiality agreements so as to preserve their flexibility to continue trading in the
company’s securities. If they expressly agreed, they would have a duty to “disclose or abstain from
trading” under Rule 10b-5, which means they would not be able to trade in those securities until the
company publicly discloses the information.
11. Reg FD Impact on Merger-Related Announcements
Question: A company seeks to announce the satisfaction of a closing condition in connection

with a pending merger. The company has already filed its definitive proxy statement. If this event
occurred prior to filing of the definitive proxy statement, the satisfaction of the closing condition
would be filed on an 8-K with the Rule 14a-12 box checked. However, the filing requirements after
the definitive proxy has been filed are less clear, and there does not appear to be an established
practice.
The current plan is to file an 8-K as well as making an additional materials filing on Schedule 14A.
Does this seem like the correct approach or does the filing only need to be made on just the 8-K or
just the Schedule 14A?
Answer: We agree with your planned approach. You would file the information under cover of
Schedule 14A, and the 8-K would protect you under Regulation FD.
12. Material Post-Closing True-Up Information Subject to Reg FD
Question: Are there Regulation FD requirements for a post-closing true-up?
Answer: Reg FD applies to any communication of material information by a company or a person

acting on its behalf to a Reg FD covered person (e.g., a broker deal, investment advisor, investor,
analyst or other market participant). If information about the post-closing true-up is material, then
a company would need to make public disclosure in a Reg FD compliant manner if it intended to
disclose it to a covered person who has not agreed to keep it confidential.

c. Private Conversations
1. Minimizing Risks of Private Analyst Communications
Question: What are the risks of management talking privately with analysts?
Answer: In the Regulation FD adopting release, the SEC stated that private discussions with
analysts seeking guidance about earnings estimates entail a high degree of risk under Regulation
FD. The perception of what occurred in a private conversation can lead to a SEC enforcement
action or private lawsuit over an alleged selective disclosure of material nonpublic information.
(Note that although private plaintiffs cannot rely on violations of Regulation FD as a basis for a
private action, Regulation FD does not affect any existing grounds for private liability under Rule
10b-5, so a selective disclosure may provide a basis for a private action under Rule 10b-5.)
Although Regulation FD has subjected private conversations with analysts to much greater
scrutiny, the SEC stated in the Regulation FD adopting release that companies still can have
private conversations with analysts over immaterial matters even if the immaterial matter happens
to be the last piece in a puzzle so that the analyst comprehends a material development for the
company. Appropriate topics for discussion with analysts may include historical information about
the company to illustrate trends in the business or the industry in general, immaterial background
information (e.g., management team experience in the industry), and the company’s strategy, goals
and management philosophy and other previously publicly disclosed information.
Clearly, absent an exclusion from coverage, the intentional disclosure of material nonpublic
information in private conversations is a violation of Regulation FD. If any material nonpublic
information is non-intentionally disclosed, it also may be a violation if the company does not then
publicly disclose that information promptly. Regulation FD requires prompt public disclosure when
a senior official of the company learns of the disclosure and knows, or is reckless in not knowing,
that the information disclosed was both material and non-public.
The SEC can bring actions under Regulation FD even when companies provide implied or indirect
earnings guidance—i.e., speak in “code” or use body language (including tone, emphasis, and
demeanor) to communicate. “Code” is slang or language for which both management and the
analyst understand the true meaning of the words. In Report of Investigation Pursuant to Section
21(a) of the Securities Exchange Act of 1934: Motorola, Release No. 34-46898 (Nov. 25, 2002),
the SEC stated, “What is particularly troubling about this case is that Motorola communicated to
the public using general terms such as “significant,” and then engaged in private discussions with
analysts to provide a more detailed quantitative definition of the code word “significant.” See also
SEC v. Schering-Plough, Litig. Rel. No. 18330 (Sept. 9, 2003) (emphasizing reactions of analysts
and investors to the “combination of spoken language, tone, emphasis, and demeanor” the CEO
displayed in private meetings, that had the effect of disclosing “negative and material, nonpublic
information regarding Schering’s earnings prospects, including that analysts’ earnings estimates
for Schering’s 2002 third-quarter were too high, and that Schering’s earnings in 2003 would
significantly decline”).

Regulation FD 4-103
2. Okay to Communicate Immaterial Information to Analysts
Question: Can companies speak privately with analysts without triggering a selective disclosure
violation?
Answer: Companies can speak privately with analysts without triggering a Regulation FD
selective disclosure violation provided the information communicated is not material or the
analysts expressly agree to maintain the confidentiality of that information until it is publicly
disclosed by the company (thus falling within the express exclusion to Regulation FD pursuant to
Rule 100(b)(2)(ii)).
As the SEC discussed in Section II.B.2 of the Regulation FD adopting release, companies can
disclose non-material information to analysts even if the information happens to be the last piece
in a puzzle such that the analyst comprehends a material development for the company. The SEC
acknowledged that analysts may discern the significance of otherwise immaterial information in
cases where the reasonable investor would not.
However, the SEC made clear that company officials assume a high degree of risk under Regulation
FD when engaging in private discussions with analysts seeking guidance about earnings estimates,
whether the earnings information is communicated expressly or indirectly or implicitly. Further,
deliberately communicating pieces of seemingly non-material information that comprise the
material whole will not avoid a Regulation FD violation. Other types of material information or
events the SEC has identified as more likely to be considered material and thus worthy of careful
consideration (as well as other material information or events, in that the SEC’s list is not intended
to be exhaustive) should be viewed in a similar fashion.
Companies can try to protect themselves by making broad public disclosure of topics that they anticipate
analysts will ask about in private, even if the public disclosure is not at the level of detail discussed with
analysts. As long as these details are not material in themselves, companies can relatively safely “drill
down” into these publicly disclosed areas during private conversations under the mosaic theory.
Also, before engaging in any one-on-one meetings with analysts, companies should consider taking
the following steps: (1) thoroughly review what has been disclosed previously; (2) review potential
questions and the law of materiality; and (3) determine questions that may or may not be answered.
Moreover, companies should be prepared to state which areas will not be discussed since such
subject matters have not yet been previously publicly disclosed.
3. Policies/Procedures Should Govern Analyst Communications
Question: What should a company do if it discovers that a senior officer had a private conversation
with an analyst?
Answer: Companies should develop and implement policies and procedures governing their
communications with securities market professionals and security holders that include identification
of authorized spokespersons and protocol relative to private communications with analysts to

prevent selective disclosure of material nonpublic information during these communications. Such
policies and procedures should also address the potential for non-intentional selective disclosures
and the means for assessing materiality and determining whether prompt public disclosure of such
information is required under Regulation FD.
A process should be pre-established to quickly respond to non-intentional, potentially material

selective disclosures for Regulation FD purposes. To make the determination timely, ideally, a
company should consider having a “SWAT” team—which may be its disclosure team—that makes
spokesperson in conjunction with inside and/or outside counsel). If the company discovers that
selective disclosure of material non-public information was improperly provided to an analyst
or other person covered by Regulation FD, the company should promptly make the information
publicly available by broadly disseminating the information in conformance with Regulation FD’s
requirements.
As an alternative, note also that, as the SEC discussed in footnote 28 of the Regulation FD adopting
release, express confidentiality agreements may be obtained from recipients of material information
after a selective disclosure has been made to address an inadvertent selective disclosure, provided
that the recipients have not disclosed the information or traded the company’s securities prior to
agreeing to maintain the information in confidence.
4. Document Private Communications
Question: In the SEC’s Regulation FD proposing release, it stated that “issuers can make sure
that some record is kept of the substance of private communications with analysts or selected
investors—for example, by having more than one person present during these contacts or by
recording conversations.” Do you have any guidance as to best practices relative to recording
private communications with analysts? Is it sufficient to record the date, time, people involved, and
general substance of the topics discussed?
Answer: From a best practice standpoint, any private communications with analysts or investors
should include one or more of the company’s designated authorized spokespersons and, if feasible,
at least two authorized spokespersons should be present.
An authorized spokesperson (or their designee) should prepare a record detailing the time, place and
nature of the communication, together with a summary of the information discussed. In addition,
authorized spokespersons responding to inquiries initiated by analysts or other investors during these
communications should document all of their responses to company-specific questions.
All such documentation should be included in a record the company maintains of all written
statements, releases or filings made by the company that contain material information about the
company including SEC filings, press releases, company statements, shareholder communications,
conference call transcripts, investor and analyst presentations, and newspaper and magazine
articles. All of these conduct expectations can be captured in the company’s written Regulation FD
or other external communications policy.

Regulation FD 4-105
5. Communications with Merger Partners Subject to Reg FD
Question: Does Regulation FD prohibit companies from privately disclosing material information
to potential merger partners?
Answer: Regulation FD does not prohibit companies from privately disclosing material
information to potential merger partners if the potential partner expressly agrees to keep the
information confidential. Companies may want to review their standard forms of confidentiality
agreements for purposes of providing that the potential partner acknowledges and represents that
Regulation FD is one of several reasons that the information must be kept confidential.
Even though communications relating to Regulation M-A transactions are not subject to Regulation
FD, this exception is not available until the commencement of the transaction, which is defined as
the first public announcement of the transaction. In other words, companies still need to cover their
communications by an express agreement of confidentiality before the public announcement of a
merger for Regulation FD purposes.
6. Communications with Venture Capitalists Subject to Reg FD
Question: Does Regulation FD prohibit companies from privately disclosing confidential informa-
tion to their venture capitalists?
Answer: Regulation FD does not prohibit companies from privately disclosing material nonpublic
information to their venture capitalists if the venture capitalists expressly agree to keep the
information confidential.
Venture capitalists typically have access to material nonpublic information from their portfolio
companies because they have large ownership stakes and board memberships. Even though venture
capitalists often are exempt from registering as an investment company and communications to
them are not covered by Regulation FD in this particular capacity (i.e., as an investment company),
communications to them are covered by Regulation FD as holders of the company’s securities
because it is unlikely that a company could have a reasonable belief that a venture capitalist
would not trade in its securities on the basis of the information, which is the test applicable under
Regulation FD for determining whether particular security holders are covered.
Under Regulation FD, companies may selectively disclose material nonpublic information to
venture capitalists in their capacity as security holders provided that the information is shared
pursuant to an express confidentiality agreement obtained in advance of the disclosure, or even
after the fact provided that the recipient has not disclosed the information or traded the company’s
securities prior to agreeing to maintain the information in confidence.
7. Confidentiality Agreements Don’t Need to Prohibit Trading
Question: Does a person agreeing to keep information confidential also need to agree not to trade
on that information?

Answer: No. A person who expressly agrees to keep information confidential does not need to
also agree to refrain from trading on that information in order for the company to comply with the
confidentiality agreement exclusion under Regulation FD. The SEC Staff addressed this in CDI
101.05, where it indicated that the confidentiality agreement need not contain an agreement not to
trade on the information in order to rely on the exclusion set forth in Rule 100(b)(2)(ii) (the express
agreement to maintain the information in confidence being sufficient).
However, a recipient of material nonpublic information under such an agreement who trades or
advises others to trade on that information may be subject to insider trading liability.
8. Don’t Rely on Third-Party Confidentiality Agreements
Question: Company is finalizing a term sheet for a proposed preferred stock offering. The term
sheet has been shared with a potential investor (“Investor A”)—subject to a confidentiality
agreement. Investor A would like to send the term sheet to another investor who may be interested
in participating in the offering (“Investor B”). There’s a confidentiality agreement between these
two investors—but no confidentiality agreement between the company and Investor B.
Investor A states that it will remind Investor B of Investor B’s existing confidentiality obligations
to Investor A and confirm in writing that Investor B will maintain the term sheet in confidence. Can
the company rely on the confidentiality agreement between the potential investors—so that the term
sheet can be shared with Investor B—and if so, would the confidentiality agreement provide cover
for the company under Regulation FD?
Answer: We suppose it might be defensible in theory—the argument is that FD’s confidentiality

agreement requirement is intended to create a duty that would be breached by the recipient of the
information if it traded on it—thus exposing that party to insider trading liability. An agreement like
this may be enough to do that.
But we would be extremely uncomfortable going down this path. You aren’t a party to the
agreement and aren’t personally witnessing the purported agreement to keep the information
confidential. In the event of a problem, we think the SEC would be very dubious about whether it
was reasonable for the company to agree to an arrangement like this.
9. Agreement to Not Violate Federal Securities Laws Inadequate
Question: Is an agreement to not violate the federal securities laws sufficient for purposes of
fulfilling the confidentiality agreement exclusion under Regulation FD?
Answer: No. In its Regulation FD CDI 101.06, the SEC Staff stated that the recipient of the
information must expressly agree to keep the information confidential to be able to rely on the
confidentiality agreement exclusion set forth in Rule 100(b)(2)(ii); simply agreeing not to violate
the federal securities laws is not sufficient .

Regulation FD 4-107
10. Factors Determining Confidentiality Agreement Duration
Question: In those cases where a company is privately disclosing material nonpublic information
(e.g., five-year projections) to a third party pursuant to an express confidentiality agreement, would
a term of one year be enough to satisfy the confidentiality exclusion set forth in Rule 100(a)(2)(ii)?
My initial thought would be that it depends on when the information disclosed will no longer be
considered material.
Answer: We agree with your approach. It would be the earlier of some prescribed term and such
time that the information has been disclosed publicly by the issuer or is no longer material. In the
case of projections, assuming no public disclosure, it would be when supervening events (impacting
management’s assumptions on which the projections were based, or otherwise) cause the informa-
tion to no longer be material or reasonably reliable. Actual results would moot projections.
11. Press Communications Should Be Handled With Caution
Question: How should companies handle interviews with journalists?
Answer: A company should handle interviews with journalists more carefully than before
Regulation FD was adopted. Even though Regulation FD does not apply to disclosures to the press
(i.e., disclosure of material non-public information to the press does not trigger a company’s public
disclosure obligation under Regulation FD), companies should be careful because:
– Once the information is shared with journalists, it is outside the company’s control as to what
the journalist will do with it
– It can sometimes be difficult to distinguish between journalists and securities market profes-
sionals (some media organizations function like market participants)
– During public offerings, anti-fraud rules and publicity restrictions may restrict a company’s
ability to provide information to journalists
Just like with analysts, companies may want to provide advance information of an unannounced
transaction so that the press can prepare an analytical article that would be published concurrently
with the company’s public announcement of the transaction. Ideally, wherever feasible, a company
should obtain an express agreement that the press will keep the information confidential until the
company is ready to publicly release the information.
12. Embargoing Permissible Means to Enable Selective Disclosure
Question: How can a company “embargo” information?
Answer: A company can embargo information by providing the material nonpublic information to
a recipient who agrees not to disclose the information until broad non-exclusionary distribution is
made or until a pre-established point in time.

An “embargo” is a type of confidentiality agreement. During the period of the embargo, the
recipient of the information owes a duty of trust and confidence to the company and can be
considered a temporary insider of the company.
13. Embargo Agreements with Analysts May Be Helpful in Mergers
Question: Can companies tell analysts about an upcoming merger before it is publicly announced?
Answer: Companies can tell analysts about an upcoming merger before it is publicly announced
only if the analysts expressly agree to maintain the confidentiality of that information until it is
publicly disclosed by the company.
In some circumstances, a company may want to inform analysts that regularly cover the company
about an upcoming transaction to allow them to evaluate it before it is publicly disclosed. This
enables the analysts to more accurately and comprehensively publish research and advise investors
immediately following the company’s public announcement about the transaction.
The SEC noted in footnote 44 of the Regulation FD adopting release (referencing certain of its
suggestions in the Section II.B.3 of the Regulation FD proposing release) that time-limited embargo
agreements with analysts are permissible and may be beneficial to company interests in appropriate
circumstances. This is so even though they arguably give the analysts an advantage over competitors
because the analysts have time to evaluate the information and will be able to provide financial advice
to their clients (and execute trades for clients) more quickly after the information is publicly released.
Companies should attempt to get this express confidentiality agreement in writing due to the
unquestionable materiality of the information, and should also limit the duration of an embargo to a
short period of time (e.g., several hours, ideally) before the public announcement to reduce the risk
of information leaks and the potential for changed circumstances (e.g., if negotiations don’t proceed
as planned and an anticipated transaction is not consummated), and to mitigate the analysts’
potential for liability as “temporary insiders” under Rule 10b-5 for trading prior to the time the
information has been disseminated to and absorbed by the marketplace.
14. Disclosures by Directors Subject to Reg FD
Question: If a director discloses material non-public information to a securities market

professional, is it a violation of Regulation FD, or does the director have the benefit of the
exemption set forth in Rule 100(b)(2)(i) and Regulation FD does not apply to the disclosure?
Answer: This would likely be a Regulation FD violation. The exemption set forth in Rule
100(b)(2)(i) would apply when the disclosure is made to a person who owes the company a duty
of trust or confidence, so it depends on the status of the market professional that was the recipient
of the director’s disclosure (e.g., is the “market professional” the company’s investment banker?)
or whether any of the other express exclusions set forth in Rule 100(b)(2) apply. The director is
a “senior official” as defined in Rule 101(f) of Regulation FD, and thus deemed to be a “person
acting on behalf of the issuer” as defined in Rule 101(c), for purposes of Rule 100(a)) in making the
disclosure of material nonpublic information.

Regulation FD 4-109
In the SEC’s Regulation FD CDI 101.11, the SEC Staff indicated that companies whose directors
are authorized spokespersons and plan to speak privately with shareholders consider implementing
policies and procedures to help avoid Regulation FD violations and/or obtain confidentiality
agreements from such shareholders such that the communications are excluded from the rule’s
coverage. This same guidance would apply to other covered securities market participants such as
analysts.
d. Dissemination of Disclosure
1. Various Permissible Means of Public Disclosure
Question: Are companies required to disseminate information through a particular method in order
to comply with Regulation FD’s public disclosure requirements?
Answer: The SEC acknowledged in the Regulation FD adopting release that there is no single
method or combination of methods of disclosure required in order to fulfill Regulation FD’s public
disclosure requirements. Although companies that use Form 8-Ks to disclose information can
be confident that they have complied with Regulation FD, companies can choose any method,
or combination of methods, of disclosure reasonably designed to effect broad, non-exclusionary
distribution of the information to the public. If a company does not use a Form 8-K, most
practitioners recommend a combination of other methods (i.e. press release and website disclosure)
to ensure that broad distribution is effected.
This flexibility is not unqualified because a company’s departure from its usual dissemination
practices could influence the SEC’s evaluation of whether a particular method is reasonable.
For example, the SEC indicated in the Regulation FD adopting release that it might question the
company’s judgment as to reasonableness if a company uses a last minute webcast to disseminate
its quarterly earnings results in the context of a concurrent, otherwise selective disclosure of that
information when the company typically discloses its results by regularly disseminated press
releases. However, the SEC also noted in the release that this does not mean that companies can’t
change their usual public disclosure practices on an ongoing (as opposed to isolated) basis.
As an investor relations matter, companies should consider whether a dissemination method or

particular time of dissemination will upset investors, journalists, or customers. For example,
disclosing information on Friday afternoon via a Form 8-K is not a sound investor relations
practice.
2. Form 8-K Itself Is Sufficient Means of Public Disclosure
Question: If a company posts its earnings release on its website (which it has done for years), as
well as furnishes it as part of a Form 8-K filing, does the company also need to issue the release
through a traditional channel such as Business Wire in order to comply with Regulation FD?
Answer: So long as you are furnishing the Form 8-K, you are complying with Regulation FD.

Rule 101(e) of Regulation FD defines “public disclosure” as follows:
(1) Except as provided in paragraph (e)(2) of this section, an issuer shall make the “public
disclosure” of information required by Rule 100(a) by furnishing to or filing with the
Commission a Form 8-K disclosing that information.
(2) An issuer shall be exempt from the requirement to furnish or file a Form 8-K if it instead
disseminates the information through another method (or combination of methods) of
disclosure that is reasonably designed to provide broad, non-exclusionary distribution of
the information to the public.
To ensure compliance, unless the company is able to rely on its website on a stand-alone basis to
meet the requirements of Regulation FD, it is important to confirm that the filing or furnished Form
8-K has been accepted for filing on Edgar and is publicly available on Edgar before posting the
earnings release on the company website as the SEC Staff stated in CDI 102.03.
3. Timing for Earnings Release & Earnings Call
Question: Is there a minimum amount of time that needs to transpire between the issuance of an
earnings release and an earnings call? Is there any issue with a company:
(1) releasing its quarterly earnings at 5:00 a.m. (Eastern time) on a given day;
(2) filing its Form 8-K under Item 2.02—Results of Operations and Financial Condition at
6:00 a.m. (Eastern time) on Edgar that same morning; and
(3) holding its investor conference call and webcast at 8:00 a.m. (Eastern time) that day?
Answer: Whether there’s adequate time for the public to digest the information also factors into
the analysis of whether the information has been adequately disseminated under Regulation FD.
In practice, companies want to allow for sufficient time for market professionals to absorb the
information in the earnings release before the call starts—so that analysts can be informed when
asking questions of management.
It’s particularly relevant if there’s major unexpected news in the release. If that’s the case—then
assuming you said something material beyond what’s in the press release during the call, your
“dawn raid” approach could be called into question.
That said, we aren’t aware of any requirements as to a minimum amount of time. If you’ve given
sufficient advance notice of the timing of your release and conference call, and if your results are
consistent with expectations, your schedule probably works. We agree you’d want to furnish the
earnings release under Item 2 .02 of Form 8-K before the call so you can avoid having to furnish a
transcript of the call.

Regulation FD 4-111
The other thing to be mindful of is the potential reaction of your analysts and investors to
this timeframe. If it’s a departure from past practice, some people may be suspicious of your
motivations.
4. Timing for Quarterly Pre-Announcement
Question: Is there a market standard, guidelines or best practice regarding the “deadline” by
which a company should pre-announce results for a prior period? It appears that most companies
pre‑announce quarterly results within 2 weeks following the end of a quarterly period. I know some
of this depends on when the company has good visibility about the quarter’s results, but I assume
at some point a company is close enough to its regularly scheduled earnings release/call that a pre-
announcement may not have much value. I’m looking for rules of the road.
Answer: We don’t think there’s a best practice—sooner is better, obviously, and the closer you get
to your scheduled release date, the less credit you’ll get for a decision to preannounce. It really does
depend on the level of visibility you have into the numbers. This is not something you want to do
twice, so it is important that the company either have a firm grasp on the numbers or have at least a
strong sense of the range by which it is likely to miss before it says something, unless it absolutely
has to say something for legal reasons.
We think there’s some sympathy for this desire at the investor and analyst level as well—we’ve
seen companies effectively parry investor questions about why no preannouncement was made on
the basis that they were dealing with a fluid situation and simply didn’t want to say something until
they had a very good handle on the situation they were dealing with.
5. Announcing Reg FD-Compliant Investor Meetings
Question: A company is holding an investor meeting that will be made available to all investors
live via webcast. Is it acceptable to file a Form 8-K to pre-announce the date, time, etc. of the
investor meeting, or must this pre-announcement be made by press release over the news wires?
Also, if a company issues a press release pre-announcing the investor meeting a reasonable number
of days in advance of the meeting, and the investor meeting is available live to all investors, does a
company have a Form 8-K obligation at all?
Answer: If a company plans to hold an investor meeting that will be concurrently publicly
disclosed via webcast, CDI 102.01 and Section II.B.4.b of the Regulation FD adopting release are
instructive as to ensuring the advance notice will comply with Regulation FD.
Pursuant to CDI 102.01, if a company wants to provide information to investors via a publicly
available conference call, it must provide adequate advance notice of the date, time, subject
matter and call-in (e.g., access) information to comply with the public disclosure requirements
of Regulation FD. The same principles apply to planned public disclosure of material nonpublic
information via a webcast.

The CDI does not address the method of dissemination that must be used to provide the advance
notice; however, Section II.B.4.b of the Regulation FD adopting release makes clear that the
“public” must be given adequate notice of the event wherein the disclosures will be made and the
means for accessing the event. The SEC’s suggested model for making a planned disclosure of
material information set forth in that release contemplates use of a press release and/or website
posting for purposes of the advance notice requirement.
To ensure that the public is given adequate notice, notice of the webcast should be given by means
of a public announcement disseminated in a fashion that satisfies Regulation FD’s public disclosure
requirements set forth in Rule 101(e)—i.e., via a Form 8-K or another method or combination
of methods of disclosure reasonably designed to provide broad, non-exclusionary distribution of
the information to the public, depending on your usual practice and what you believe will result
in broad, non-exclusionary distribution. Many (if not most) companies issue a press release and
also post an announcement of the webcast on their website, or issue a press release, post the press
release on their website and file a Form 8-K to reach as many people as possible.
Note that a Form 8-K is always required for earnings releases under Item 2.02 of Form 8-K.
6. Live/Recorded Webcasts for Investor Days
Question: A company wants to host an investor day but doesn’t expect disclosure of any material
nonpublic information. Does it need to be made available via a live webcast? What if a company
prefers not sharing a live webcast, but rather a posted replay at a later time?
Answer: If there’s no material information to disclose, you don’t need to have a live webcast of
the investor day. However, we think that’s probably a bad idea—it’s impossible to guarantee that
there won’t be any disclosure of material nonpublic information during the presentation or as part
of the investor Q&A session. If you haven’t given notice and made the presentation available via
a webcast, it may very well become a Regulation FD problem with an inadvertent disclosure, and
investors will also likely expect a webcast of the company’s investor day. Your investor relations
team might also prefer a live webcast over a posted replay later.
7. Publicly Furnish Handouts from Reg-FD Compliant Meetings

Question: If a company is holding a Reg FD-compliant announced analyst presentation (which
presentation will be in-person and webcast), the general practice is to file the accompanying slides
beforehand (to meet the guidance of the FD release and C&DI’s). How many companies take a
more aggressive position and file the slides after the presentation (given that it was FD-compliant
announced and is being broadly disseminated in-person and webcast)?
Answer: We recommend posting the slides—on the corporate website or an 8-K—shortly before
the webcast starts, since people who dial into the webcast should get access to the slides at the same
time the in-room people do. In addition, it ensures non-exclusionary disclosure of material non-
public information. Not everyone with an interest in the company is going to be able to access the

Regulation FD 4-113
live webcast, and making the information contained in those presentation materials public prior to
the presentation is consistent with Reg FD’s objectives.
This isn’t an issue if the slides don’t contain any material non-public information, but most
companies don’t want to analyze the deck each time—or vary their practice based on its contents.
8. Adequate Notice for Reg FD-Compliant Conference Call
Question: If a company wants to make public disclosure of material nonpublic information under
Regulation FD by means of a conference call, what information must the company provide in the
notice and how far in advance should notice be given? Is seven days’ notice a best practice (as
opposed to a requirement)? And if so, has anyone become comfortable with a shorter period of
time?
Answer: According to the SEC’s Regulation FD CDI 102.01, an adequate advance notice under
Regulation FD must include the date, time, subject matter and call-in information for the conference
call.
The CDI further provides, “Issuers also should consider the following non-exclusive factors in
determining what constitutes adequate advance notice of a conference call:
Timing: Public notice should be provided a reasonable period of time ahead of the conference
call. For example, for a quarterly earnings announcement that the issuer makes on a regular
basis, notice of several days would be reasonable. We recognize, however, that the period of
notice may be shorter when unexpected events occur and the information is critical or time
sensitive.
Availability: If a transcript or re-play of the conference call will be available after it has
how, and for how long, such a record will be available to the public.”
These factors are relevant regardless of the manner of announcing the conference call. For example,
announcing a call on Form 8-K doesn’t eliminate the reasonable advance notice concept—you
still need to provide a waiting period between making that filing & holding the call if you want to
protect the content of the call from Regulation FD concerns.
There’s no specific timing requirement in Regulation FD, but it’s common to give notice of
an earnings release, presentation and conference call through a press release distributed by a
wire service at least seven days prior to the release of earnings. Quite a few companies provide
more than seven days’ notice, with practices continuing to evolve. Check out this excerpt from
a 2015 McDermott Will memo—which is posted in the “Earnings Releases” Practice Area on
TheCorporateCounsel.net:
In terms of advance notice, 86% of companies make their announcements anywhere

from one week to one month in advance of the call, with two to three weeks prior being
the most popular lead time—35%—followed by one to two weeks prior—27%. Of the

respondents, 6% reported announcing more than one month prior. Only 2% reported
waiting until after the end of the quarter to make their announcement. This stands in
contrast to respondents surveyed in 2001, of which 16% reported waiting until the week
of the call to announce it.
So, there’s no bright line, but this isn’t an area where you want to be an outlier—particularly if
what you’re doing is a departure from past practice and the news is different from what’s expected.
What’s more, the trend seems plainly toward longer notice periods than were customary shortly
after Regulation FD was adopted.
9. Toll-Free Numbers Not Required for Investor Calls (But Overwhelmingly Common)
Question: Is there a requirement to provide toll-free lines for earnings and other investor calls?
A regular line would still be available for shareholders to dial in, and the presentations would be
webcast.
Answer: There’s not a rule that mandates the use of a toll-free number, but the issue under
Regulation FD is whether the information in the call has been adequately disseminated to the
public. You could certainly argue that providing toll-free access to the conference call isn’t
mandatory in order to comply—but most people don’t look to innovate when it comes to
Regulation FD, and the use of a toll-free number is standard market practice.
10. Disclosure of Material, Related Information on Earnings Webcast Permissible
Question: The company issued a press release two weeks ago announcing a real-time earnings
conference webcast with dial-in information available to the public. Suppose that during the
webcast, a senior official of the company inadvertently disclosed material, non-public information.
Must the company file a Form 8-K to publicly disclose the inadvertently disclosed information or
does the mere fact that the webcast is available to the public by definition mean this is a “public
disclosure” which would obviate the need to file a separate Form 8-K?
Answer: The Regulation FD adopting release specifically contemplated that disclosures during a
properly noticed, publicly available earnings call would be deemed publicly disseminated so that
there wouldn’t be a Regulation FD violation for such disclosures. In Section II.B.4.b of that release,
the SEC stated:
“We believe that issuers could use the following model, which employs a combination of
methods of disclosure, for making a planned disclosure of material information, such as a
scheduled earnings release:
First, issue a press release, distributed through regular channels, containing the
information;
Second, provide adequate notice, by a press release and/or website posting, of

a scheduled conference call to discuss the announced results, giving investors

Regulation FD 4-115
both the time and date of the conference call, and instructions on how to access
the call; and
Third, hold the conference call in an open manner, permitting investors to listen
in either by telephonic means or through Internet webcasting.
By following these steps, an issuer can use the press release to provide the initial broad
distribution of the information, and then discuss its release with analysts in the subsequent
conference call, without fear that if it should disclose additional material details related to
the original disclosure it will be engaging in a selective disclosure of material information.
We note that several issuer commenters indicated that many companies already follow this
or a similar model for making planned disclosures.”
Therefore, there would be no need to file a Form 8-K in this situation provided that the referenced
inadvertently disclosed material non-public information constitutes additional material details
related to the original publicly disclosed disclosure.
11. Disclosure of Related Information on Earnings Call Doesn’t Trigger Additional 8-K
Question: What type of information disclosed (either in the prepared script or in the Q&A
portion) in a properly noticed earnings call will trigger an additional Form 8-K requirement
under Regulation FD? An Item 2.02 Form 8-K attaching the issued earnings release (that includes
guidance) will be filed before the call. For example, if in response to an analyst’s question about
where the company will end its year from a revenue growth perspective, we state that we still
believe revenue will be 10% better than last year and we have completed two fiscal quarters, would
that disclosure trigger a Regulation FD Form 8-K requirement?
Answer: With respect to the release of the forward looking revenue growth information, the
company should be okay from a Regulation FD perspective if the company is already complying
with the conditions of Item 2.02(b) of Form 8-K, because it would be providing that information in
a broadly accessible, publicly-available conference call that was pre-announced by press release.
This process tracks what would be required for satisfying Regulation FD obligations relating to
disclosures made on a properly noticed conference call. Refer to Rule 101(e)(2) of Regulation FD,
Section II.B.4.b of the Regulation FD adopting release and the SEC’s Regulation FD CDI 102.01.
12. Feeding Questions to Analysts/Others to Ask Could Be Problematic
Question: Is it legally permissible for a company to feed questions to an analyst or a participant at

an analyst or earnings release conference call, i.e., request the analyst to ask certain questions? The
company won’t selectively share any material non-public information with the analyst.
Answer: Regulation FD would be the big concern here from a federal securities law perspective,
in that suggesting the question itself might be construed as selective disclosure to an enumerated
person. We certainly think it would potentially look bad if someone found out that the analyst was
asking a question that the company had planted—and it may be something that is inconsistent

with NIRI’s standards for best practices in connection with earnings calls, so that might be worth
checking.
13. Form 8-K Sufficient for Earnings Guidance Update (But Press Release Typically Also
Issued)
Question: A company is considering updating its earnings guidance via a Form 8-K. Is the compa-
ny obligated to also issue a press release regarding the same? Also, what Form 8-K Item is relevant
to the disclosure regarding the update to guidance?
Answer: Regulation FD Rule 101(e) defines public disclosure to include either a Form 8-K or
any other method (or combination of methods) of disclosure reasonably designed to provide
broad, non-exclusionary distribution of the information to the public (the latter being a facts and
circumstances-specific determination). Therefore, the Regulation FD requirements are satisfied with
the filing or furnishing of a Form 8-K. In accordance with CDI 102.03, it is important to confirm
that the filing or furnished Form 8-K has been accepted for filing on Edgar and is publicly available
on Edgar before selectively disclosing the information.
The foregoing notwithstanding, the most common practice when updating guidance in writing is to issue
a press release and furnish the press release with an Item 7.01 (Regulation FD Disclosure) Form 8-K.
Historically, companies issued press releases on this sort of topic to satisfy the Exchange rules,
which required disclosure via a press release. While both the NYSE and Nasdaq rules now permit
this type of information, which is clearly material, to be disclosed by means of any Regulation FD-
compliant method (or combination of methods), the NYSE still encourages its listed companies to
issue press releases for the release of material information (i.e., information that might reasonably
be expected to materially affect the market for the listed company’s securities), and this remains the
most commonly followed practice.
Also keep in mind that NYSE companies are prohibited from issuing material news immediately
after the market closes. They need to wait until the earlier of publication of the company’s official
closing price or five minutes after the NYSE’s official closing time (usually 4:00 pm ET). The only
exception is if a Regulation FD release is necessary following unintentional selective disclosure.
For Regulation FD and anti-fraud purposes, many companies have become comfortable that a
press release, coupled with an 8-K filing, is the best means for ensuring that material information is
publicly disseminated.
14. Use of Website for Reg FD Disclosure
Question: Can the company’s website be used for purposes of meeting Regulation FD’s requirements?
Answer: The SEC’s 2008 interpretive guidance on the use of company websites affirms that
website posting of information may be an adequate disclosure method on a standalone basis for
Regulation FD purposes provided that certain requirements are met.

Regulation FD 4-117
The principles-based guidance instructs companies as to how to analyze, based on their particular
facts and circumstances, whether information is deemed “public” for purposes of evaluating
The guidance sets forth three elements that companies must consider in their analysis of whether
information is deemed to be “public” for purposes of evaluating whether a subsequent selective
disclosure violates Regulation FD. Companies must consider whether and when:
(1) the company’s website is a recognized channel of distribution;
(2) the posting of the information disseminates it in a manner making it available to the
securities marketplace in general (i.e., the manner in which information is posted, and the
timely and ready accessibility of the information to investors and the markets, such that the
information is considered “disseminated”); and
(3) there has been a reasonable waiting period for investors and the market to react to the
posted information.
The guidance provides a nonexclusive list of factors for companies to consider in evaluating the
first two elements of the analysis. Determination of whether there has been a reasonable waiting
period (the third element) depends on the particular facts and circumstances of the dissemination
and varies by company. The guidance sets forth factors that may be relevant to this evaluation.
Whether website posting of information itself satisfies the “public disclosure” (of material
nonpublic information) requirement of Regulation FD upon the making of a selective disclosure
(whether intentional or non-intentional) depends on whether the website posting is reasonably
designed to provide broad, non-exclusionary distribution of the information to the public. In
making this determination, companies are guided to look to elements (1) and (2) above and the
associated non-exclusive list of factors provided by the SEC, and consider their websites’ capability
to meet the applicable (simultaneous or prompt) public disclosure timing requirements.
than fact-based compliance standards contained in the SEC guidance relative to company websites,
not surprisingly, few companies to date have indicated an intent to rely solely upon website
disclosure for Regulation FD purposes. In the absence of bright-line standards and precedent, it is
suggested that companies do so only after thorough evaluation of their facts and circumstances in
consultation with counsel with expertise in this area.
Notwithstanding the foregoing, consistent with the SEC’s remarks in the Regulation FD adopting
release, companies often use their websites in combination with other methods to effect the public
disclosure required under Regulation FD—i.e., “disclosure that is reasonably designed to provide
broad, non-exclusionary distribution of the information to the public.” For example, many companies
combine earnings press releases with website disclosure to ensure or bolster their public disclosure.

15. Determining Whether Corporate Website is Recognized Channel of Distribution
Question: Can anyone point me to company disclosure in 1934 Act filings which aims to inform
investors that the company will release and/or post important information on the company’s web
site? Companies routinely say that their Forms 10-K, 10-Q and 8-K are available through their
website; however I’m trying to find broader language that aims to establish the company’s website
as a recognized channel of distribution.
Answer: In its 2008 Website Guidance, the SEC stated that companies should consider certain
factors (among others) in evaluating whether their company website is a recognized channel
of distribution and whether the company information is “posted and accessible” and thus
“disseminated” for Regulation FD purposes:
– Whether and how companies let investors and the markets know that the company has a
web site and that they should look at the company’s web site for information. For example,
does the company include disclosure in its periodic reports (and in its press releases) of its
web site address and that it routinely posts important information on its web site?
– Whether the company has made investors and the markets aware that it will post important
information on its web site and whether it has a pattern or practice of posting such
information on its web site;
– Whether the company’s web site is designed to lead investors and the market efficiently to
information about the company, including information specifically addressed to investors,
whether the information is prominently disclosed on the web site in the location known and
routinely used for such disclosures, and whether the information is presented in a format
readily accessible to the general public;
– The extent to which information posted on the web site is regularly picked up by the market
and readily available media, and reported in, such media or the extent to which the company
has advised newswires or the media about such information and the size and market
following of the company involved. For example, in evaluating accessibility to the posted
information, companies that are well-followed by the market and the media may know
that the market and the media will pick up and further distribute the disclosures they make
on their web sites. On the other hand, companies with less of a market following, which
may include many companies with smaller market capitalizations, may need to take more
affirmative steps so that investors and others know that information is or has been posted
on the company’s web site and that they should look at the company web site for current
information about the company;
– The steps the company has taken to make its web site and the information accessible, including
the use of “push” technology, such as RSS feeds, or releases through other distribution channels
either to widely distribute such information or advise the market of its availability. We do not
believe, however, that it is necessary that push technology be used in order for the information to

Regulation FD 4-119
be disseminated, although that may be one factor to consider in evaluating the accessibility to the
information;
– Whether the company keeps its web site current and accurate;
– Whether the company uses other methods in addition to its web site posting to disseminate
the information and whether and to what extent those other methods are the predominant
methods the company uses to disseminate information; and
– The nature of the information.
than fact-based compliance standards contained in the SEC guidance relative to company websites,
not surprisingly, few companies to date have indicated an intent to rely solely upon website
disclosure for Regulation FD purposes.
While Google is frequently cited based on its announcement in 2010 that it would be using its website
exclusively to release its earnings information, in that the release of earnings information is governed
by Item 2.02 of Form 8-K, which Google necessarily adhered to, Google’s website has in fact been
used in combination with other disclosure methods to effect public disclosure of this information.
In April 2010, Google issued an advisory press release concerning its just released quarterly financial
results and advising as to its new disclosure practices. Rather than issuing its quarterly financial
results via a press release through a wire service, Google invited investors to visit its investor relations
website to view its earnings release. The advisory release further stated “Google intends to make future
announcements regarding its financial performance exclusively through its investor relations website.”
Google also issued a press release announcing that its earnings call would be webcast on its website.
Google furnished its earnings release on Form 8-K under Item 2.02 (Results of Operations and
Financial Condition), which satisfied Regulation FD (Form 8-K and website posting with prior
announcement) and the instructions to Form 8-K. The earnings webcast complied with instructions
to Item 2.02 of Form 8-K because (i) the earnings information was furnished on Form 8-K, (ii) the
webcast was preceded by a public announcement, and (iii) the webcast and related Regulation G
information were posted on the company website simultaneously with the earnings call.
So Google didn’t actually use its website as the sole channel of distribution for release of
its earnings information because it followed a traditional Regulation FD-compliant method
(prior announcement via a press release and concurrent Form 8-K and webcast) in releasing its
financial information. The fact is that all companies subject to the Form 8-K rules are required
to file Form 8-Ks in connection with their release of quarterly or annual results of operations or
financial condition. However, Google set the stage for use of its website on a stand-alone basis
for Regulation FD disclosure purposes and, because Google’s line of business is so closely tied to
the Internet and to its website specifically, it would seem easier for it to establish its website as a
“recognized channel of distribution” for disclosure of other types of material information.

Other companies following this path include Sun Microsystems (announcement in July 2010) and
Microsoft (announcement in October 2010).
For examples of Form 8-Ks announcing the corporate website / social media channels as a
recognized channel of distribution, see Tesla’s Form 8-K in November 2013, Ford’s Form 8-K in
May 2021 or Dolby Lab’s Form 8-K in May 2021- all under Item 8.01.
For the majority of companies, we would advise continuing to ensure that the Form 8-K has been
accepted for filing and is publicly available on Edgar (in accordance with CDI 102.03) before
posting the release on the company’s web site to ensure Regulation FD compliance.
16. Determining Whether Website Information Is Generally Available
Question: Can a company satisfy Regulation FD by issuing a press release that directs readers to a
presentation with material non-public information posted on the website? Or must the material non-
public information be in the press release itself? Not clear from the guidance.
Answer: The SEC’s 2008 guidance is deliberately principles-based so as to accommodate future

technology advances. It’s theoretically possible to use the website alone to satisfy Regulation FD, if
there’s advance notice to shareholders & if:
– The website is a recognized channel of distribution;
– Dissemination of information on the website is done in a manner that makes it generally

available to the marketplace; and
– There’s been a reasonable waiting period for investors and the market to react to the posted
information.
Using a press release to direct readers to the corporate website is not an uncommon practice—
especially among very large companies whose websites are widely followed & very small
companies who rely on website dissemination to be more cost-effective. But we’ve seen some
blowback from reporters & retail investors. They may be unable to access the information as
quickly as institutional investors with machine-readable trading services—and share prices may
move even before news services can report the numbers.
Companies should carefully consider the factors from the SEC’s 2008 guidance to evaluate whether
website information is timely & readily available to the securities marketplace in general—such as
whether the information is prominently disclosed on the web site in a known & routine location,
whether it’s presented in a readily-accessible location & format, and whether the website can
handle increased traffic without crashing.

Regulation FD 4-121
17. Use of Social Media for Public Disclosure
Question: What about Twitter, Facebook and other social media? Can they be used for purposes of
assessing the application of Regulation FD and Regulation FD’s public disclosure requirements?
Answer: The SEC’s 2008 interpretive guidance on the use of company websites makes clear
that corporate blog postings would be analyzed in the same way as other website postings for
purposes of Regulation FD compliance. In that 2008 release, the SEC noted, “For purposes of
Regulation FD, a posting on a blog, by or on behalf of the company, would be treated the same as
any other posting on a company’s web site.” Referencing its discussion in that release of the factors
companies should consider in evaluating whether information posted on a company website would
be considered public for purposes of Regulation FD, the SEC stated, “The company would have to
consider the factors outlined above to determine if the blog posting could be considered ‘public.’”
And the SEC’s April 2013 Section 21(a) report of investigation concerning Netflix (Rel. No.
69279) affirms that the framework and principles outlined in the SEC’s 2008 interpretive guidance
on the use of company websites—and specifically the concept that the investing public should be
alerted to the channels of distribution a company will use to disseminate material information—
apply equally to company disclosures made via social media. The report emphasizes the SEC’s
expectation that companies will “examine rigorously” the non-exhaustive list of factors included in
the 2008 guidance to evaluate whether a particular social media channel is a “recognized channel
of distribution” for communicating with their investors. As with website disclosure, this requires
companies to conduct a thorough facts and circumstances analysis before being in a position to
conclude that disclosures made via a social media channel will be “public” for Regulation FD
purposes.
In 2018, the SEC charged Elon Musk, CEO of Tesla, with violating 10b-5 anti-fraud rules when
he tweeted about taking Tesla private. The SEC didn’t charge Elon Musk or Tesla with violating
Regulation FD—which may be due to the fact that Tesla filed an 8-K in 2013 noting that Musk’s
Twitter account may be used as a dissemination method. However, the SEC pointed out in
its settlement with Elon Musk that despite this Form 8-K, social media posts need to also go
through adequate disclosure controls and procedures if the social media platform will be used to
communicate with investors.
18. Reg FD-Compliant Investor Conferences
Question: If a company issues an advance (e.g., 5 business days) press release over the news
wires notifying investors of a webcast presentation at an investor conference, and then permits all
investors to listen to the event via webcast on the company’s website, does this meet the public
disclosure guidelines of Regulation FD?
Answer: Assuming the press release is distributed through a widely circulated news or wire service
and provides investors with the time and date of the webcast, and instructions on how to access
the webcast, the procedure that you describe is consistent with the procedure outlined in Section
II.B.4.b of the Regulation FD adopting release and the SEC’s Regulation FD CDI 102.01.

19. Using Website to Announce Investor Conference
Question: Our company is concerned about the constant need to issue press releases in connection
with its attendance at investor conferences—during which it may or may not reaffirm guidance.
The company usually press releases its attendance at these events and includes the webcast link so
that in the event that management goes “off script,” we are covered. But rather than issue a press
release each time the company attends a conference, we’d rather just post the event on the investor
relations section of the company’s website. Is this common?
Answer: Whether the website is sufficient for this type of announcement depends on whether
it’s a “recognized channel of distribution”—and whether the information is generally available—
as described in the SEC’s 2008 guidance on how to use websites. In a 2010 survey on
TheCorporateCounsel.net, only 3 of 54 companies indicated that they viewed their website as a
“recognized channel of distribution.” But that number was up to 29% when the survey was run
again in 2017. So it’s becoming more common to rely on websites for Regulation FD purposes—
but probably still the minority practice.
20. Presence of Media Ordinarily Inadequate to Achieve Public Disclosure
Question: Can companies provide disclosure to journalists as a way to comply with Regulation FD?
Answer: As affirmed in the SEC’s Regulation FD CDI 102.06, the mere presence of the press in a
limited-access setting does not exempt the disclosures from Regulation FD, even though the disclo-
sures to the press itself are not covered by Regulation FD. The key inquiry is whether the disclosure
achieves the goal of effecting broad, non-exclusionary distribution of information to the public as
While it is possible that disclosure to the press in particular circumstances may achieve this stan-
dard of public disclosure, that is not likely in most cases. To be safe, a company should not rely
on communications to the press to satisfy Regulation FD’s public disclosure requirement unless it
knows the journalist will effect a simultaneous live public broadcast of the presentation for which
adequate advance notice to the public has been given.
21. Intentional Disclosures Require Knowing or Reckless Conduct
Question: When is a disclosure “intentional”?
Answer: A disclosure is intentional when the person making the disclosure either knows, or is reck-
less in not knowing, that the information they are communicating is both material and nonpublic.
In the Regulation FD adopting release, the SEC stated that, in view of the definition of recklessness
that is prevalent in the federal courts, it is unlikely that companies engaged in good-faith efforts to
comply with Regulation FD will be considered to have acted recklessly. The SEC also indicated
that, in the case of an intentional, selective disclosure attributable to a mistaken determination of

Regulation FD 4-123
materiality, liability will arise only if no reasonable person under the circumstances would have
made the same determination.
22. Simultaneous Disclosure Means Public Disclosure Must be Concurrent
Question: Would holding an analyst meeting (not properly noticed and webcast in accordance
with Regulation FD) after the market closes and then issuing the press release containing the
material information disclosed in the meeting (e.g., guidance) an hour later satisfy Regulation FD’s
“simultaneous” disclosure requirement applicable to intentional disclosures?
Answer: No. Our view is that there is no basis for concluding that you could wait an hour (or
any amount of time for that matter) following an analyst meeting where material non-public
information is selectively disclosed. We think that the requirement for “simultaneous” disclosure
of intentionally disclosed material nonpublic information means what it says—i.e., happening at
the same time. Although dissimilar facts, this position is reflected in Regulation FD CDI 102.04, as
well as past SEC enforcement cases. We don’t think that anything in Regulation FD on this point
would depend on whether or not the market is open for trading during the time of the selective
disclosure.
23. Non Reg FD-Compliant Semi-Public & Private Forums
Question: What types of limited access settings are there?
Answer: Quite a few. The following settings may have numerous participants but, absent other
information to the public, would not satisfy Regulation FD’s public disclosure requirements:
– Shareholder meetings that are not webcast or broadcast by electronic means such that dis-
closure is reasonably designed to provide broad, non-exclusionary distribution of the infor-
mation to the public
– Investor conferences hosted by investment banks
– Company-sponsored open houses or analyst days
– Online interview and chat sessions involving senior officers
Material disclosures made in these settings ordinarily would be deemed selective and thus subject
to Regulation FD’s public disclosure requirements.

24. Guidelines for Disclosures in Limited Access Settings
Question: How should companies make presentations in limited access settings to avoid Regula-
tion FD violations?
Answer: Companies should take steps such as the following to avoid the potential for Regulation
FD violations:
– Minimize informal conversations with meeting participants before and after the planned
presentation
– Ask the sponsor to implement procedures so that the presentation is not a limited access
setting (e.g., webcast preceded by adequate advance notice)
– Issue a press release or file a Form 8-K before a meeting is held that contains the material
nonpublic information expected to be disclosed
– Before the presentation starts, publicly furnish any presentation handouts or slides
– Have counsel and other members of the communication team preview any presentation
materials or scripts before meeting
– Make the presentation on the basis of a prepared script or outline
– Require that at least two company employees be present so that they can confer and
collaborate on what transpired in case there are questions about whether there were
non‑intentional selective disclosures
– Record the presentation, including the question and answer session, and have the investor
relations officer or other qualified employee or agent review the record to ensure that
material nonpublic information wasn’t inadvertently disclosed
– Familiarize oneself and have available for reference recent or otherwise relevant press
releases, SEC filings and Regulation FD-compliant transcripts to affirm or determine if
particular information has previously been made public
25. Webcasting Annual Shareholder Meetings Not Required, But May be Considered
Question: Should companies webcast annual meetings (with pre-announcement as to how to

access) in order to cover, for Regulation FD purposes, any disclosure coming out of the Q&A
portion of the meeting or presentations that might be material and non-public?
Answer: Companies are not required to webcast their annual meetings either under SEC or
Exchange rules unless they believe that material non-public information might be communicated
and thus need to ensure Regulation FD compliance for those disclosures. Properly announced

Regulation FD 4-125
webcasts are one of the broad non-exclusionary distribution methods the SEC listed as complying
with Regulation FD’s public disclosure requirements.
26. Disclosure at Shareholder Meetings Isn’t Public Disclosure
Question: Can a company provide information at its shareholders’ meeting and consider the infor-
mation communicated at the meeting publicly disclosed in accordance with Regulation FD?
Answer: No. In accordance with the SEC’s Regulation FD CDI 102.05, a company can provide
information at its shareholders’ meeting in compliance with Regulation FD’s public disclosure
requirement only if the meeting is webcast or broadcast by electronic means such that disclosure
is reasonably designed to provide broad, non-exclusionary distribution of the information to the
public. It is not sufficient that the meeting merely be open to the public.
27. Virtual Shareholder Meeting Inadvertent Disclosure: Consider Posting Transcript, Even
for Reg FD Compliant Meetings
Question: If an executive responding to shareholder questions at a virtual shareholder meeting

discloses material non-public information, is the company required to make a replay of that meeting
publicly available for a certain period of time? I see that in the footnote to Reg FD adopting release,
the SEC encouraged companies to make such replay available (and to indicate how long it will be
available), but is it required?
Answer: The first question to consider is whether your virtual annual meeting is compliant with
Regulation FD’s requirements. If the virtual meeting isn’t made available to the public and advance
notice of how the public may access the meeting is not provided, then it won’t satisfy Regulation
FD’s requirements (just as most traditional annual meetings don’t). See Reg FD CDI 102.05. So,
if your meeting isn’t Regulation FD compliant and an executive inadvertently spills the beans on
MNPI during the meeting, you will have to promptly disclose the information in a Regulation FD
compliant manner (press release, Form 8-K, etc.)
Assuming that the virtual annual meeting is Regulation FD compliant, there’s no specific
requirement for a transcript to be posted, but it is clearly a best practice when it comes to earnings
calls and other management presentations. Most annual meetings have not been structured to
comply with Regulation FD in the past, and the universe of virtual annual meetings isn’t very
extensive. That means there isn’t a lot of precedent when it comes to posting transcripts. Since
that’s the case, we recommend companies post a transcript and keep it up for as long as they
customarily keep earnings releases posted.
28. Ensure Prominent Disclosure of Virtual Meeting Format Announced in Proxy Materials
Question: The company issued a press release announcing that it was switching to a virtual annual
meeting and provided a link to a site where the annual meeting can be accessed (without having to
register in advance). The press release was posted on the company website and filed as DEFA 14A.
Would that notice be considered broadly disseminated to satisfy Reg FD obligations? Alternatively,

if the company announced the virtual meeting in its proxy materials filed with the SEC, would that
work under Reg FD? In both cases, assume that guests are allowed to listen in, but not otherwise
participate in the meeting.
Answer: Yes, we think if you allow everyone to listen in and have provided advance notice
informing the public that they may participate through a combination of a press release, website
disclosure and an SEC filing, the virtual meeting should be FD compliant. In a situation where the
company announced the virtual meeting in its proxy materials, that could work, but it needs to be
prominently disclosed. See Regulation FD CDI 102.02.
29. Informing NYSE of Material Information If Happens After Market Close
Question: A NYSE listed company will enter into an agreement at or about 5PM on a Friday.
Information in the agreement will be of the type which might reasonably be expected to materially
affect the market for the company’s securities, and thus would be subject to the NYSE’s immediate
release rules of the NYSE Listed Company Manual. The company wishes to put out the press
release at 7AM on Monday. Given that the markets are closed between execution on Friday and
release on Monday, is this an acceptable scenario, or would the NYSE consider this to be in
violation of its rules?
Answer: We think you need to notify the Exchange in advance in accordance with Section 202.06
of the NYSE Listed Company Manual. You might want to call your Exchange rep and talk with
them about the situation generally in advance and obtain instructions about how—and when—to
notify before the release is issued at 7 am on Monday. We’ve had similar situations when we were
in-house where we were uncertain about logistics—and the NYSE was good about providing
direction.
Also keep in mind that NYSE companies are prohibited from issuing material news immediately
after the market closes. They need to wait until the earlier of publication of the company’s official
closing price or five minutes after the NYSE’s official closing time (usually 4:00 pm ET). The only
exception is if a Regulation FD release is necessary following unintentional selective disclosure.
30. Regulation FD Disclosure on Weekend or Holiday When EDGAR Unavailable
Question: A client wishes to file a corporate presentation under Item 7.01 of Form 8-K, but
the client wishes to post the presentation to its website on a weekend or a day that EDGAR is
unavailable. May the client post the presentation to its website on a day that EDGAR is unavailable
and still make use of an Item 7.01 Form 8-K? If a client were to selectively disclose MNPI to a
limited group without a confidentiality agreement in place on a weekend (or day that EDGAR is
unavailable) could the client make use of Item 7.01 for that selective, intentional disclosure?
Answer: We don’t think the SEC would sign off on the application of the Reg FD safe harbor to
information in an 8-K for material that was disclosed in a non-FD conforming manner a day or
two in advance of the filing, even if the markets weren’t open when the material was disclosed.

Regulation FD 4-127
Investors who were aware of the material would potentially have a trading advantage over the rest
of the market when trading began, particularly since the futures market opens at 6 pm on Sunday.
e. Securities Offerings & Regulation FD
1. Communications During Private Placements Subject to Reg FD
Question: What are a company’s options for communicating material nonpublic information with
securities market participants during a private placement if the recipients of the information do not
expressly agree to keep it confidential?
Answer: Unless the recipients of the information expressly agree to keep the information confidential,
a public company communicating material information privately with securities market participants
during a private placement must broadly disclose the information to the public or risk violating
Regulation FD. The SEC made clear in Section II.B.6.a.ii of the Regulation FD adopting release that
public disclosure pursuant to Regulation FD is appropriate even if it calls into question the private
placement or other exemption from Securities Act registration upon which the company is relying.
Absent confidentiality agreements, the company should broadly disseminate the information to
the public through a recognized method or combination of methods to effect public disclosure that
satisfies Regulation FD before or simultaneously with communicating the information privately to
securities market professionals or prospective investors. Risks of Regulation FD violations can be
further minimized by including in the publicly disclosed information any other information that the
company expects will be responsive to anticipated questions from analysts and investors (if and to
the extent that the company will want to discuss such information).
If the company is not public, it does not have to comply with Regulation FD, and therefore,
confidentiality agreements are not an issue.
2. Private Placement Road Show Communications Subject to Reg FD
Question: What can companies disclose to securities market professionals during road shows for
private placements?
Answer: It depends on what the company has already publicly disclosed.
Regulation FD applies to communications made in connection with unregistered offerings such as

private placements. Therefore, road show communications in connection with such offerings are
subject to Regulation FD.
A company wishing to discuss material nonpublic information with securities market professionals
or prospective investors during a road show may either obtain a confidentiality agreement
from each recipient of the information or simultaneously publicly disclose (in accordance with
Regulation FD) the information that it plans to discuss privately. Risks of Regulation FD violations
can be further minimized by including in the publicly disclosed information any other information

that the company expects will be responsive to anticipated questions from analysts and investors (if
and to the extent that the company will want to discuss such information).
3. Planned Private Offering as Material, Non-Public Information
Question: If the fact of a planned private offering is itself MNPI, and if institutional investors will
not sign confidentiality agreements, then how can an issuer conduct a private offering (e.g., 144A/
Reg S) without violating Reg FD? While general solicitation is no longer prohibited and an issuer
could issue a press release disclosing a proposed private offering, my understanding is that this is
not market practice.
Answer: We’d dispute the contention that Rule 135c press releases aren’t common market practice
in 144A deals. There are quite a lot of them; many are issued at closing, but a substantial number
are issued when a deal is launched. Do a Google search of this phrase: “This press release is issued
pursuant to Rule 135c” and you’ll find a bunch.
4. Private Placement Investors May Be Unwilling to Enter Confidentiality Agreements

Question: Why might investor participants in a private placement context refuse to expressly agree
to keep material nonpublic information confidential?
Answer: Because if they expressly agree, they have a duty to “disclose or abstain from trading”
under Rule 10b-5, which means they can’t trade in those securities until the company publicly
discloses the information. Since investors often want the flexibility to keep trading in the
company’s securities—particularly other types of securities—they may be unwilling to enter into
this type of agreement. This is particularly true for institutional investors who often trade in the
different types of securities that a company has issued.
If an investor agrees to keep the information confidential, it does not have the ability to disclose
the information to comply with the “disclose” aspect of its “disclose or abstain” duty because it
has contractually agreed to keep quiet. An investor’s “disclose or abstain” duty arises because the
company furnishes the information under a contractual duty to protect its confidence.
If an investor breaches a confidentiality agreement, the company can sue for breach of contract and the
investor may be liable for insider trading. However, the company will not have violated Regulation FD.
5. Public Disclosure Requirement in Unregistered Offerings May Impact Exemption

Question: What if a company planning to selectively disclose material information during an
unregistered offering can not obtain express confidentiality agreements from the recipients?
Answer: In that event, public disclosure of the information must be made in accordance
with Regulation FD. Companies should consider whether such selective (and thus
Regulation FD‑required simultaneous public) disclosure will have an adverse effect on their ability
to rely on a private placement exemption due to the general solicitation prohibition.

Regulation FD 4-129
In the Regulation FD adopting release, the SEC indicated that it had carefully considered the
concerns by commentators about applying Regulation FD to unregistered offerings, but ultimately
decided that, because they are not subject to the full public disclosure and liability protections that
the Securities Act applies to registered offerings, unregistered offerings should not be exempt, and
that companies should either obtain confidentiality agreements or provide broad public disclosure
of selectively communicated information in accordance with Regulation FD.
The SEC indicated that, absent an understanding of confidentiality, companies will need to consider
the impact their selective disclosure could have on any exemption they use in the unregistered
offering context, and that company counsel should advise the client of the potential complications
that selective disclosure of material nonpublic information could raise before an exempt offering
begins.
6. Using Securities Act Rule 135c to Comply With FD
Question: Our company is engaging in purely offshore offering pursuant to Regulation D &
Regulation S—the offering is material in and of itself. As such, we intend to announce the offering
pursuant to Rule 135c. In the course of the offering, we intend to provide investors with certain
projections that we feel may be material to the company as a whole. In balancing Regulation
FD’s disclosure obligations, confidence in relying on confidentiality agreements, and Rule 135c
communication rules, it seems the Exchange Act disclosure obligations would come out ahead in
this “collision.”
But, we find ourselves wondering how to best achieve the public announcement. Our inclination is
to issue a 135c-compliant press release announcing the offering, file it on a Form 8-K and include
additional Item 7.01 disclosure disclosing the projections that will be given to investors. We have
no real concerns about conditioning any U.S. market interest in the offering since this is purely
offshore, but we’re concerned about violating 135c. What’s the typical approach in this situation?
Answer: We think that what you’re proposing will work. Check out Securities Act Sections CDI
139.32—it applies to a Regulation S & Rule 144A deal, but we think the underlying principle is the
same for a Regulation S & Regulation D deal:
Question 139.32
Question: An Exchange Act reporting company is conducting an exempt offering

pursuant to Regulation S and Rule 144A and intends to include material non-public
information in the offering memorandum to be distributed to investors in the exempt
offering. In order to satisfy its obligations under Regulation FD, may the company file the
complete offering memorandum as an exhibit to an Item 7.01 Form 8-K during the time
the offering memorandum is distributed to potential investors in the exempt offering?
Answer: No. The filing of the complete offering memorandum on Form 8-K during
the exempt offering period likely would be inconsistent with the exemptions. To avoid
this concern while still complying with Regulation FD, the company could file a Form

8-K that sets forth the material non-public information that is included in the offering
memorandum, including information about the offering of the type permitted to be
disclosed pursuant to Securities Act Rule 135c. [Mar. 4, 2011]
7. Securities Act Rule 135c Likely Designed for Written Communications
Question: Can a company make an oral pre-filing communication of a planned registered offering
in reliance on the Rule 135 safe harbor? Rule 135 refers to “publish[ing] through any medium a
notice of a proposed offering” and requires the “notice” to include a legend. Can these elements be
satisfied with an oral communication?
Answer: The safe harbor is designed for written communications, so it looks like an awkward
fit, but “any medium” seems pretty broad. Even if the SEC concluded that oral statements aren’t
technically covered, there’s a strong argument that oral communications that are limited to the
items addressed in the rule shouldn’t be regarded as “offers”.
8. Investment Bankers Acting as Private Placement Agents Are Company “Agents”

Question: How should investment bankers, as private placement agents, behave in light of
Regulation FD?
Answer: As an “agent” of the company, who is considered to “stand in the shoes” of the company,
investment bankers need to be careful to not violate Regulation FD.
Investment bankers have access to material, nonpublic information as temporary insiders.
Therefore, they cannot selectively disclose the information to offerees or other securities market
participants (such as analysts or other investment banker personnel who are not temporary
insiders). By “stepping into the shoes” of the company, they have the same obligations to maintain
information in confidence and can be liable for and trigger Regulation FD violations.
9. Reg FD Doesn’t Apply to Registered M&A Communications

Question: How does Regulation FD impact a company involved in a registered merger or
acquisition?
Answer: Regulation FD does not apply to disclosures made in connection with registered mergers
and acquisitions. Therefore, companies can continue to use one-on-one communications with
large investors or road shows with a limited audience during these transactions. Rule 101(g) of
Regulation FD defines when covered registered securities offerings are deemed to commence and
end, with communications made before and after such period being subject to Regulation FD.
The exemption for registered securities offerings notwithstanding, regular communications made
by a company, such as quarterly analyst conference calls, are still subject to Regulation FD even
though the company may be in the midst of a registered offering.

Regulation FD 4-131
V. History
a. 2000—Adoption of Regulation FD
In mid-2000, the SEC adopted Regulation FD (Rel. No. 33-7881; Aug. 15, 2000). Regulation FD
regulates how companies provide disclosure to the market. The SEC adopted Regulation FD to
protect investors by creating a level playing field for all investors for access to material nonpublic
information. The SEC’s primary concern was that selective disclosure, and the perception of
selective disclosure, of material nonpublic information, leads to a loss of investor confidence in
the integrity and fairness of the securities markets. The SEC was also concerned about rumored
instances of companies using material information to curry favor with analysts.
Regulation FD represented a fundamental change in the SEC’s approach to selective disclosure.

Before Regulation FD was adopted, the SEC relied on Rule 10b-5 to bring selective disclosure
enforcement cases. Since the adoption of Regulation FD, companies engaging in selective
disclosure practices also violate a disclosure regulation. In other words, Regulation FD is a
disclosure regulation, not an insider trading provision.
The proposed adoption of Regulation FD generated a fair amount of criticism including concerns that:
– It would discourage companies from making quality disclosure—i.e., have a “chilling”
effect;
– In certain circumstances, Regulation FD may result in too much disclosure, thereby forcing
investors to weed out material information from marginally important or marginally
relevant information;
– The ambiguous legal standards surrounding Regulation FD impose too much risk on
companies; there is insufficient protection for the disclosure of forward-looking information
it fosters, and there is insufficient guidance about “materiality”;
– The rule’s legal standards require disclosure in circumstances that conflict with existing law,
particularly in the offering context;
– It would have the effect of eliminating the role of analysts as a filter of public information;
and
– It would contribute to stock volatility as a result of an anticipated decrease of information in

the market.
The SEC acknowledged some of these concerns in the Regulation FD adopting release.
Although the vast majority (individual retail investors) of a record volume of 6,000 comment
letters supported the adoption of Regulation FD, most in the corporate community urged further
modification or expressed complete resistance to it when it was proposed. In response to the
concerns expressed in response to the proposing release, the SEC narrowed the scope of covered
communications, narrowed the types of company personnel covered, made clear that Regulation

FD does not establish a duty under Rule 10b-5, and clarified the relevant standard of conduct,
among other changes.
Regulation FD significantly impacted how companies communicate with analysts, and with all
other market participants. Although Regulation FD did not change the law regarding general
duties to disclose, its adoption ultimately prompted many companies to make more disclosure,
and increased the disclosure of forward-looking information. At the same time, as expected,
companies reduced the number of investor conferences and one-on-one meetings with analysts
once Regulation FD was adopted.
Although, in general, companies are communicating less directly with analysts regarding earnings
information, consistent with the SEC’s discussion in the Regulation FD adopting release, many
companies still regularly communicate with analysts regarding immaterial matters which, under the
mosaic theory, is not a violation of Regulation FD even if the immaterial matter happens to be the
last piece in a puzzle so that the analyst comprehends a material development for the company.
b. 2000 and 2001—Regulation FD Telephone Interpretations
In 2000 and 2001, the SEC’s Division of Corporation Finance issued Supplements to its Telephone
Interpretations Manual relating to Regulation FD in response to then recent telephone inquiries. (As
noted below, these Interpretations were subsequently superseded by Compliance and Disclosure
Interpretations published in August 2009 and June 2010.)
c. 2001—SEC Commissioner Recommendations
In December 2001, SEC Commissioner Laura Unger issued a report examining the impact of Regulation
FD on the marketplace since its adoption in October 2000, and made the following recommendations:
1. The SEC should tell companies more definitively what information has to be made public
under Regulation FD by providing additional guidance on materiality.
2. The Commission should incentivize companies to provide more information by allowing

greater use of technology to satisfy Regulation FD’s public information dissemination re-
quirements.
3. The Commission should closely examine post-Regulation FD market information and

filings to better determine the regulation’s impact on the depth and quality of company
information in the marketplace.
d. 2008—“Company Web Site” Interpretive Guidance
When the SEC adopted Regulation FD in 2000, it explicitly stated in the Regulation FD adopting
release that, at that time, posting of new information on a company website alone was not sufficient
to satisfy the Regulation FD’s public disclosure requirements. However, in that release, the SEC

Regulation FD 4-133
acknowledged that, as technology evolved, companies may be able to rely solely on their web
sites to make public disclosure at some point in the future: “As technology evolves and as more
investors have access to and use the Internet, however, we believe that some issuers, whose
websites are widely followed by the investment community, could use such a method.”
Based on the dramatic increase in the use of company web sites since the adoption of Regulation
FD, in 2008, the SEC provided guidance regarding the use of company web sites for purposes
of Regulation FD. The 2008 guidance affirmed that website posting of information may be an
adequate disclosure method on a standalone basis for Regulation FD purposes provided that certain
requirements are met.
e. 2009 and 2010—Compliance and Disclosure Interpretations
In August 2009 and June 2010, the Division of Corporation Finance published Compliance and
Disclosure Interpretations (CDIs) representing the Division’s interpretations of Regulation FD that
had the effect of superseding the non-binding telephone interpretations that had been issued by SEC
Staff in 2000 and 2001. The interpretations reflect the views of the Staff; they are not rules, regula-
tions, or statements of the SEC, and the SEC has neither approved nor disapproved them.
The SEC makes clear that the positions set forth in its CDIs (relative to all topics—not just
Regulation FD) don’t necessarily contain a discussion of all material considerations necessary to
reach the conclusions stated and they are not binding due to their highly informal nature. Rather,
they are intended as general guidance and should not be relied on as definitive. The SEC also
made clear that there can be no assurance that the information presented in these interpretations is
current, as the positions expressed may change without notice.
All that said, as a practical matter, subject to taking into account relevant particular facts and cir-
cumstances, where applicable, legal practitioners tend to rely on these CDIs to guide their actions
for purposes of assuring Regulation FD compliance.
f. 2010—Dodd-Frank Removal of Credit Rating Agencies
In September 2010, the SEC amended Regulation FD pursuant to the Dodd-Frank Wall Street
Reform and Consumer Protection Act of 2010. The amendment deleted the specific exemption
in Regulation FD provided for disclosures made to nationally recognized statistical rating
organizations (NRSRO) and credit rating agencies for the purpose of determining or monitoring
credit ratings.
Practically speaking, this amendment was not deemed likely to have any significant impact, as the
Credit Rating Agency Reform Act of 2006 (2006 Act) removed most credit rating agencies from
the scope of Regulation FD in conjunction with their exclusion from the definition of “investment
adviser,” one of the categories of enumerated persons covered by Regulation FD. More specifically,
the 2006 Act authorized the SEC to register credit rating agencies as NRSROs and excluded
NRSROs as investment advisers (under the Investment Advisers Act of 1940) unless they were

engaged in issuing investment recommendations. As most credit rating agencies are NRSROs and
are not engaged in investment advisory services, communications to them would not be covered by
Regulation FD.
The foregoing notwithstanding, there remains a concern that Dodd-Frank expressed a

Congressional intent that rating agencies not be exempt from the coverage of Regulation FD, as
one of the primary goals of Dodd-Frank was to increase transparency in the rating process. In
light of this concern, and as an additional protective measure, particularly where there may be any
question as to whether a rating agency may be viewed as an investment adviser, it is expected that
companies will obtain express confidentiality agreements from credit rating agencies in order to
avail themselves of the express exemption to disclosures made pursuant to Rule 101(b)(2)(ii) of
Regulation FD.
g. 2013—Section 21(a) Report on Social Media
In April 2013, the SEC issued a Section 21(a) Report of Investigation—triggered by the SEC’s inquiry
into a July 2012 post made by Netflix’s CEO on his personal Facebook page—providing guidance on
the application of Regulation FD to disclosures made through social media (Rel. No. 69279).
In the report, the SEC clarifies that its 2008 interpretive guidance on the use of company websites—
and specifically the concept that the investing public should be alerted to the channels of distribution
a company will use to disseminate material information—applies equally to, and provides the relevant
framework for, evaluating whether a company’s social media disclosures satisfy Regulation FD.

Regulation FD 4-135
Appendix A—Regulation FD Compliance Roadmap
Roadmap for a General Counsel
Regulation FD Roadmap
1. Who is Speaking 2. Who is Receiving Information
“Senior Officials” “Specified Persons”
1 . Any director 1 . A broker or dealer, or a person

associated with a broker or dealer
2 . Any executive officer
2 . An investment advisor,
3 . Any investor relations or
institutional investment manager,
public relations officer (or a
or a person associated with either
person with similar functions)
an investment advisor or
4 . Any other officer, employee, institutional investment manager
or agent of the company who
3 . An investment company or an
regularly communicates with
affiliated person thereof
the person receiving the
information or with 4 . A stockholder or bondholder, if
stockholders or bondholders the circumstances make it
reasonably foreseeable that the
Unless:
person will trade on the basis of
the information
The Company has enacted written
policy to narrow this group by But, Regulation FD does not apply to
identifying certain designated disclosure made:
senior officials who may talk to
Regulation FD enumerated 1 . to any person who owes the
persons (Specified Persons) – but company a duty of trust or
any such non-authorized confidence (e .g ., directors,
disclosure may violate insider officers and other employees of
trading law . the company, attorneys,
accountants, etc .);

Compliance with Regulation FD
1. Who is Speaking 2. Who is Receiving Information
2 . to any person who expressly

agrees to keep the information in
confidence (e.g., confidentiality
agreement, etc.); or
3 . in connection with certain
securities offerings registered
under the US Securities Act of
1933, as amended, if the
disclosure is made by the
registration statement, a free
writing prospectus or certain
other means .
3. What is Disclosed? 4. What does Regulation FD

Require?
“Material Nonpublic Information “Public Disclosure”

Regarding the Company or its
Securities” The company shall make public
disclosure of that information by:
1 . furnishing to or filing with the

SEC a Form 8-K disclosing that
information; or
2 . disseminating the information
through another method (or
combination of methods) of
disclosure that is “reasonably
designed to provide broad, non-
exclusionary distribution of the
information to the public .”

Regulation FD 4-137
5. When Must the Public 6. Is Disclosure via Conference
Disclosure be Made? Call Sufficient?
1 . Simultaneously, in the case of Yes, if Adequate Advance Notice

an “intentional” disclosure
Adequate advance notice includes the
“Intentional” means the date, time, subject matter and call-in
person knows, or is reckless information for the conference call .
in not knowing, that the
Non-exclusive factors to determine
information he or she is
adequate advance notice include:
communicating is both
material and nonpublic . 1 . Timing: Public notice should be
provided a reasonable period of
2 . Promptly, in the case of a
time ahead of the conference
non-intentional disclosure
call. For example, for a quarterly
“Promptly” means as soon as earnings announcement that the
reasonably practicable (but in company makes on a regular
no event after the later of 24 basis, notice of several days
hours or the commencement would be reasonable . The period
of the next day’s trading on of notice may be shorter when
the NYSE after a senior unexpected events occur and the
official learns of the non- information is critical or time-
intentional disclosure of sensitive .
information that the senior 2 . Availability: If a transcript or
official knows, or is reckless
replay of the conference call will
in not knowing, is both
be available after it has occurred
material and nonpublic) .
(for instance, via the company’s
website), companies should
indicate in the notice how, and
for how long, such record will
be publicly available .
150 © Baker & McKenzie LLP

7. Is Disclosure on the Company’s Website Sufficient?
Maybe
The following conditions must be satisfied for information to be “public” or

publicly “disseminated” on a company’s website . These conditions depend
on facts and circumstances . There is no “bright-line” test for evaluating
compliance with these conditions, no weighting of the factors or specific
number of them required to be present.
1 . Recognized Distribution Channel - website must be a recognized

distribution channel for information about the company, its business,
financial condition and operations .
2 . Marketplace Availability - posting must result in dissemination in a
manner making it available to the securities marketplace in general .
For both #1 and #2, the following is a non-exclusive list of supporting
factors:
• Marketplace Awareness - adequately informing the marketplace of the

website, e.g., SEC periodic reports and press release disclosure of
website address and the fact that the company routinely posts important
information there
• Posting Pattern/Practice - pattern of posting important information on
the website
• Website Design - website designed to lead investors and market
efficiently to information; prominent disclosure in location known and
used for such disclosure; presented in format readily accessible by
general public
• Regular Media Distribution - website information is regularly picked
up and distributed by market and “readily available media” (may
depend on market capitalization/following; smaller companies may
need more steps)

© Baker & McKenzie LLP 151
Regulation
Regulation FD
FD 4-123
4-139
• Accessibility - Internet infrastructure is accessible and can

accommodate traffic spikes that may accompany posting major
information, e .g ., “push” technology
• Website Maintenance - website is kept current and accurate
• Other Considerations - consider nature of information and whether
website is the principal method of dissemination
3 . Reasonable Waiting Period - must have occurred for the securities
marketplace to react to the posted information . Length of waiting
period depends on particular company and its facts and circumstances,
which may include:
• Company Characteristics - size and market following
• Website Access - extent to which investor-oriented information on
website is regularly accessed
• Market Awareness - steps that the company has taken to make investors
and the market aware that its website is used as a key source of
important company information and to identify the location of posted
information
• Active Dissemination - whether the company has taken steps to actively
disseminate the information or the availability of the information
posted, including using other channels of distribution
• Nature and Complexity of Information - if the information is important,
whether the company has taken additional steps before posting to alert
investors and the market to the fact that important information will be
posted, e .g ., filing Form 8-K, issuing a press release, etc .
© 2016-2017 E.P. Executive Press, Inc.

8. Is Disclosure Sufficient in a 9. Additional Practice Tips
Different SEC Filing?
Maybe Per SEC interpretive guidance:
The company may make 1 . Regulation FD does not create

disclosure via another SEC filing any duty to update .
(e.g., Form 10-Q, proxy statement,
2 . The “confidentiality agreement”
etc .) instead of a Form 8-K if:
exclusion requires an express
1 . the document is filed within agreement to keep the
the required Regulation FD information confidential .
timeframe; 3 . After making public disclosure
via an SEC filing, the company
2 . the disclosure is brought to
may provide the disclosure
the attention of the reader;
privately to a Specified Person
3 . the disclosure is not buried after confirmation of the filing on
within the document; and the EDGAR database.
4 . the disclosure is not made in
piecemeal fashion throughout
the document .
***

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TheCorporateCounsel.

© 2022-2023 EP Executive Press, Inc. / 800.737.1271 / info@ccrcorp.com

II. SEC Staff Guidance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-13

© 2022-2023 EP Executive Press, Inc.

b. Interpretive Guidance: Corporate Web Sites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-19

III. How the Rules Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-26

© 2022-2023 EP Executive Press, Inc.

– Private Guidance Reaffirmations Okay in Limited Circumstances . . . . . . . 4-38

© 2022-2023 EP Executive Press, Inc.

– Prepare to React to Private Analyst Communications After the Fact . . . . . . 4-55

© 2022-2023 EP Executive Press, Inc.

f. Timing of Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-72

© 2022-2023 EP Executive Press, Inc.

– Implement Policies Addressing Director Communications

IV. Common Questions & Our Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-92

© 2022-2023 EP Executive Press, Inc.

11. Reg FD Impact on Merger-Related Announcements . . . . . . . . . . . . . . . . . 4-101

© 2022-2023 EP Executive Press, Inc.

20. Presence of Media Ordinarily Inadequate to Achieve Public

© 2022-2023 EP Executive Press, Inc.

I. SEC Rules and Regulations

Below is the text of Regulation FD:

Rule 100 General rule regarding selective disclosure.

(1) Simultaneously, in the case of an intentional disclosure; and

(2) Promptly, in the case of a non-intentional disclosure.

(i) Who is a broker or dealer, or a person associated with a broker or dealer, as

(ii) Who is an investment adviser, as that term is defined in Section 202(a)

(iii) Who is an investment company, as defined in Section 3 of the Investment

© 2022-2023 EP Executive Press, Inc.

(ii) To a person who expressly agrees to maintain the disclosed information

(B) A free writing prospectus used after filing of the registration

(C) Any other Section 10(b) prospectus;

(D) A notice permitted by Rule 135 under the Securities Act

(E) A communication permitted by Rule 134 under the Securities Act

(F) An oral communication made in connection with the registered

This section defines certain terms as used in Regulation FD (§§243.100 –243.103).

(a) Intentional. A selective disclosure of material nonpublic information is “intentional”

(e) Public disclosure.

© 2022-2023 EP Executive Press, Inc.

(g) Securities offering. For purposes of §243.100(b)(2)(iv):

(1) Underwritten offerings. A securities offering that is underwritten commenc-

(2) Non-underwritten offerings. A securities offering that is not underwritten:

(i) If covered by Rule 415(a)(1)(x) (§230.415(a)(1)(x) of this chap-

(ii) If a business combination as defined in Rule 165(f)(1)

(iii) If an offering other than those specified in paragraphs (a) and

Rule 102 No effect on antifraud liability.

No failure to make a public disclosure required solely by §243.100 shall be deemed to be

Rule 103 No effect on Exchange Act reporting status.

© 2022-2023 EP Executive Press, Inc.

required to be filed pursuant to Section 13 or 15(d) of the Securities Exchange Act of

II. SEC Staff Guidance

a. Compliance and Disclosure Interpretations

1. Issuer May Selectively Confirm Forecast Under Certain Circumstances

© 2022-2023 EP Executive Press, Inc.

2. Regulation FD Does Not Itself Create Duty to Update

Question: Does Regulation FD create a duty to update?

4. Selective Disclosure to Analysts Who Agree to Maintain Confidentiality is Permitted

Answer: Yes. [Aug. 14, 2009]

Question: If an issuer gets an agreement to maintain material nonpublic information in confidence,

© 2022-2023 EP Executive Press, Inc.

Answer: No. An express agreement to maintain the information in confidence is sufficient. If a

6. Agreement to Not Violate Securities Laws is Not Sufficient for Confidentiality

7. Regulation FD Not Applicable to Road Show Disclosures in Connection with Registered

8. Regulation FD Applies to Road Show Disclosures in Connection with Private Placement