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Full Disclosure and Traders

Traders Magazine, December 2000

Lee A. Pickard

Regulation FD, adopted by the Securities and Exchange Commission, forbids selective disclosure of material nonpublic information to market professionals by issuer companies. As a result, corporations and other issuer companies are tightening up the manner in which they disseminate information to broker dealers, investment advisers, investment companies and other institutional investors.

Regulation FD (shorthand for full disclosure') directly affects securities analysts and equity traders. Security analysts argue that the regulation will inhibit the flow of corporate and financial information to investors and lead to increasing volatility in stock prices as information is disseminated into the markets on a more "controlled" basis. Regulation FD may benefit equity traders, however, by providing more equitable access to significant market information.

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