Regulation Full Disclosure has decreased the volume and quality of information released by public companies, according to a survey released today by the Association for Investment Management and Research. Also, 71% of respondents believe the SEC regulation has contributed to market volatility because companies are providing less guidance than before on earnings. Nearly two-thirds of respondents said quality of oral communications has declined, and 52% said clarity has deteriorated. But opinion is more closely split on whether companies are doing a better job with written communications: 31% said the frequency of written information from companies is better, vs. 22% who said its worse; and 27% said timeliness has improved, vs. 18% that said it has declined.
"Clearly, many of our members feel that too many companies are taking an excessively conservative stance and (are) misinterpreting the new regulation to mean that they should have no one-to-one or small-group communication with anyone at all, Patricia D. Walters, AIMR senior vice president, said in a release. Rather, the rule "only prohibits selective disclosure or private communication of material, non-public information, she added.