SEC Releases Regulation FD Interps
The SEC’s Division of Corporation Finance has released a summary of Regulation FD interpretations, many of which provide guidance to the buy-side. The Division confirmed that an issuer can review and comment on an analyst’s model without violating/triggering Regulation FD so long as the issuer only shared “inconsequential data” that allowed a skilled analyst to “form a mosaic that reveals material nonpublic information.” The Division also explained that an issuer would not violate Regulation FD by confirming previous forecasts. Additionally, the Division re-iterated that Regulation FD is not triggered if the recipient executes a confidentiality agreement.
OUR TAKE: Issuers often use Regulation FD as a shield against probing buy-side analysts. By knowing the rules, analysts may obtain useful information without triggering the required disclosure.