With October marking the 10th anniversary of RegFD, now is an appropriate time for everybody in the industry – communicators, IROs, CEOs, institutional investors, retail traders – to take a step back and consider the true value of this landmark legislation.
In a nutshell, RegFD is designed to ensure that all individuals, companies and investors, everywhere, no matter size of fund, geographic location or industry status have access to the same information at the same time and with the same degree of opportunity. To borrow a phrase from the military, RegFD is meant to guarantee that “no one is left behind.”
It is a simple, direct, egalitarian concept that should be applauded at every turn.
Yet recently, in a select few but visible instances, the foundation upon which RegFD is built is coming under threat. Under the auspices of “SEC interpretive guidance” and the notion that certain corporate websites may attract enough traffic to be perceived as a common meeting point, the best intentions of “full-and-fair disclosure” are being brushed aside in favor of the limited engagement and single-pronged disclosure associated with advisory releases and/or website only disclosure.
Plainly and simply, this practice contradicts the intent of Reg FD. It limits engagement and creates an uneven playing field among investors. It makes life more difficult for the large majority of investors and for the media disrupting their workflow. In most instances, it limits or delays pick up and opens the door for companies to engage in selective disclosure. While it very well may allow a company to comply with its legal obligations, it is not the right option for anybody who has any involvement with a publicly traded company on any level.
Sure, you may accuse PR Newswire of being biased because our business will be impacted if a large number of companies move towards web only disclosure. And yes, part of our business is built on providing a proven, efficient system for disclosing material information to the widest possible audience. That said, this part of our business accounts for less than 10% of our overall global revenues, and we have significant revenues relating to hosting and managing investor relations websites that benefits from web disclosure. This issue is a lot bigger than PR Newswire or any of its competitive set. An integrated approach to disclosure is the only way that a company can accomplish maximum engagement with its constituents and create a level playing field. This can only be achieved through the use of push and pull tactics including a strong corporate website as well as press releases and other tools.
If you take a moment to reflect on RegFD and the spirit of disclosure, it becomes quickly apparent that the “solutions” being proposed today are not in the public’s best interests.
RegFD is about enhancing access. Not limiting it.
RegFD is about ubiquity. Not selectivity.
The Spirit of Disclosure is about being open and engaging. Not restrictive.
The Spirit of Disclosure is about understanding the needs of the “man on the street.” Not just the “man in the suite.”
So, to the vast majority of investors, media, corporate communications professionals, attorneys and public executives who still recognize the immense value that full-and-fair disclosure provides, I ask you to celebrate ten years of improved disclosure due to RegFD and join me in ensuring that it remains as vital tomorrow as it is today.
Authored by Scott Mozarsky, chief commercial officer, PR Newswire