Legal Definitions - Regulation Fair Disclosure (FD)

Regulation Fair Disclosure (FD) is a rule created by the Securities and Exchange Commission (SEC) that requires public companies to share important information with everyone at the same time. This information is called "material non-public information" and it includes things like earnings reports and other important news that could affect the company's stock price.

Before this rule was created, some companies would share this information with certain people, like stock analysts or big investors, before telling everyone else. This gave those people an unfair advantage because they could use the information to make decisions about buying or selling the company's stock before anyone else knew what was going on.

Now, companies have to share this information with everyone at the same time, so that everyone has a fair chance to make decisions based on the same information. If a company accidentally shares the information with some people before others, they have to tell everyone else as soon as possible.

For example, let's say that a company is going to announce that they had a really good quarter and made a lot of money. Before Regulation FD, they might have told a few big investors about this news before telling everyone else. Those investors could have bought a lot of the company's stock before the news was announced, and then sold it for a profit once the news became public. Now, the company has to tell everyone at the same time, so that everyone has a fair chance to buy or sell the stock based on the same information.