VIENNA, VA: Fearing that its members won’t be adequately braced for the SEC’s stringent new rules, the National Investor Relations Institute has stepped up its campaign to explain the potential impact of the newly enacted Regulation FD.
VIENNA, VA: Fearing that its members won’t be adequately braced for
the SEC’s stringent new rules, the National Investor Relations Institute
has stepped up its campaign to explain the potential impact of the newly
enacted Regulation FD.
Taking its show on the road, NIRI plans to espouse what it views as the
evils of FD at events in eight cities between now and mid-October.
NIRI was quick to target the issue of ’earnings guidance’ in a recent
Executive Alert to its members. Regulation FD reads, ’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.’
’I’ve talked with several securities lawyers on this, and they all find
it troubling that the SEC addresses the issue of earnings guidance in
absolute terms when, in practice, the overall issue is not that clearly
defined,’ said NIRI president and CEO Lou Thompson.
With FD taking effect in roughly two months - in the middle of the
earnings season for many - the clock is ticking. Most IR pros are
already bracing for the changes.
Leon Berman, SVP and head of Makovsky & Company’s IR practice, said the
rule will make it harder for analysts to do their jobs. ’The onus will
be on the IR practitioners to find ways to communicate to the Street,
such as by issuing more press releases,’ he said. ’The risk is if
analysts can’t get that guidance, the estimates will be wide.’
For those who are hoping that the SEC may consider a grace period for IR
pros struggling to get their arms around FD, forget about it.
’Rules are rules,’ said SEC spokesman John Heine.