![]() This rule provides that a person trades "on the basis of" material nonpublic information when the person purchases or sells securities while aware of the information. Rule 10b5-1 addresses the issue of when insider trading liability arises in connection with a trader's "use" or "knowing possession" of material nonpublic information. Under the regulation, the required public disclosure may be made by filing or furnishing a Form 8-K, or by another method or combination of methods that is reasonably designed to effect broad, non-exclusionary distribution of the information to the public. ![]() The timing of the required public disclosure depends on whether the selective disclosure was intentional or non-intentional for an intentional selective disclosure, the issuer must make public disclosure simultaneously for a non-intentional disclosure, the issuer must make public disclosure promptly. The regulation provides that when an issuer, or person acting on its behalf, discloses material nonpublic information to certain enumerated persons (in general, securities market professionals and holders of the issuer's securities who may well trade on the basis of the information), it must make public disclosure of that information. Regulation FD (Fair Disclosure) is a new issuer disclosure rule that addresses selective disclosure. In response to the comments we received on the proposal, we have made several modifications, as discussed below, in the final rules. We are adopting new rules and amendments to address the selective disclosure of material nonpublic information by issuers and to clarify two issues under the law of insider trading. 3 Additionally, the Commission is adopting amendments to Form 8-K. SUPPLEMENTARY INFORMATION: The Securities and Exchange Commission today is adopting new rules: Regulation FD, 1 Rule 10b5-1, 2 and Rule 10b5-2. Levine, Sharon Zamore, or Jacob Lesser, Office of the General Counsel at (202) 942-0890 Amy Starr, Office of Chief Counsel, Division of Corporation Finance at (202) 942-2900. The rules are designed to promote the full and fair disclosure of information by issuers, and to clarify and enhance existing prohibitions against insider trading.ĮFFECTIVE DATE: The new rules and amendments will take effect October 23, 2000.įOR FURTHER INFORMATION CONTACT: Richard A. SUMMARY: The Securities and Exchange Commission is adopting new rules to address three issues: the selective disclosure by issuers of material nonpublic information when insider trading liability arises in connection with a trader's "use" or "knowing possession" of material nonpublic information and when the breach of a family or other non-business relationship may give rise to liability under the misappropriation theory of insider trading. S7-31-AH82ĪGENCY: Securities and Exchange Commission. ![]() SECURITIES AND EXCHANGE COMMISSION 17 CFR Parts 240, 243, and 249 Release Nos.
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