VIENNA, VA: The National Investor Relations Institute (NIRI) last week fired the latest volley in the debate over selective disclosure, asking the Securities and Exchange Commission to hold off on implementing Proposed Regulation FD and allow the industry to adopt its own rules.
VIENNA, VA: The National Investor Relations Institute (NIRI) last
week fired the latest volley in the debate over selective disclosure,
asking the Securities and Exchange Commission to hold off on
implementing Proposed Regulation FD and allow the industry to adopt its
NIRI voiced its opinion in a 12-page comment submitted to the commission
earlier this month. The SEC had begun soliciting comments on the
proposal after introducing it last fall, eventually extending the
comment period to run through the end of this week (PRWeek, March
If passed, the rule would require public companies to disclose all
significant information publicly, rather than selectively meting it out
to affected parties.
’We recommended a private sector initiative between NIRI, the Securities
Industry Association (SIA), the Investment Company Institute and the
Association for Investment Management and Research to come up with
industry-wide standards,’ said NIRI president and CEO Louis Thompson.
The private-sector proposal would likely build on ideas found in NIRI’s
April 1998 Standards of Practice for Investor Relations.
In its plea to put the rule on the back burner, NIRI questioned whether
the SEC was being a bit heavy-handed in its approach.
’We are not suggesting that selective disclosure does not happen,’ the
group wrote in its formal comment. ’But we do question whether the
magnitude of these occurrences justifies rule-making by the SEC.’
However, with SEC Chairman Arthur Levitt pushing hard for the new rule,
it’s highly unlikely the commission will postpone its decision for long
- and Thompson knows it.
’The political reality is that there is going to be a rule of some
kind,’ said Thompson. ’We’ve met with four of the SEC’s commissioners,
and they generally feel that the rule is going through.’
Over the past several months, Levitt has stated his willingness to
consider all ideas. Responding to a NIRI letter proposing the
private-sector approach, Levitt responded, ’I have found that often such
private sector panels can be very effective in developing market-driven
solutions to complex issues. We will certainly consider doing so in this