Regulation Fair Disclosure (Reg FD) Explained

Regulation Fair Disclosure (Reg FD) Explained

Regulation Fair Disclosure (Reg FD) implemented in October 2000 stops companies from selectively disclosing essential information. It aims to create a level playing field for all investors by requiring companies to issue a press release alongside their earnings and forecast calls, making the information available to the general public.


Reg FD is a rule established by the Securities and Exchange Commission (SEC) to prevent public companies from selectively disclosing material nonpublic information to specific market professionals and shareholders. According to Reg FD, if a publicly-traded company shares such information with a limited group, it must also make it publicly available. Intentional disclosures should be made simultaneously, while non-intentional disclosures must be made promptly. This ensures fair and equal access to critical information for all investors.

Taking a Closer Look at Reg FD

In an effort to address a significant issue from the past, Reg FD was introduced. Many companies used to release crucial information during meetings and conference calls, making it inaccessible to most shareholders and the public. The purpose of Reg FD is to enhance transparency and accountability, ensuring a level playing field for both individual and institutional investors.

Purpose of Reg FD

Reg FD was created as a response to instances where stock issuers provided advance warnings of earnings and other nonpublic information exclusively to selected institutional investors and analysts. This unfair practice allowed those privileged few to profit or avoid losses at the expense of other investors, leading to concerns about a loss of confidence in corporate data integrity and the possibility of illegal insider trading. The new rules came into effect in October 2000.

Complying With Reg FD

To comply with Reg FD, companies are now required to make recordings of their conference calls with analysts available to the public once those sessions are concluded. This ensures that the information shared in such calls is accessible to all, fostering a fairer investment environment.

Specific Limitations of Reg FD

The scope of Reg FD is limited to interactions with securities market professionals and holders of the issuer's securities likely to influence their trading activity, excluding all other communications with individuals beyond the issuer.

Those falling under Reg FD's scope include senior officials of the issuer and others who regularly communicate with securities holders and market professionals. However, the rule allows companies to continue disclosing information to the media and issuing standard business communications like press releases.

Publicly traded companies can conduct earnings and forecast calls for analysts, but they must simultaneously release press statements detailing the information shared during those calls. Recordings of the calls are also made available to the public after the sessions end, and the company may file a Form 8-K with the SEC to provide further public disclosure of the shared information.


Regulation Fair Disclosure is a rule that aims to enhance transparency and accountability in financial reporting. By requiring companies to make critical information publicly available, it ensures a level playing field for investors. The rule has specific limitations, but it has contributed to creating a fairer investment environment.

Regulation Fair Disclosure (Reg FD)
Form 8-K
Securities and Exchange Commission (SEC)
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