Regulation FD 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 trade on the basis of the information), it must make public disclosure of that information. As required by Section 939B of the Dodd-Frank Act, the SEC amended Regulation FD to remove the specific exemption provided to nationally recognized statistical rating organizations and credit rating agencies for disclosure made to them for the purpose of determining or monitoring a credit rating. The revised rule will be effective for disclosure made on or after October 4, 2010.
Companies can continue to utilize the exemption from Regulation FD for communications made to persons who agree to keep the information confidential. Further, it is unclear whether the exemption was necessary since nationally recognized statistical rating organizations are not among the enumerated persons that trigger Regulation FD violations.