Yes, public companies can make disclosures through social media. The U.S. Securities and Exchange Commission (SEC) has provided guidance on the use of social media for corporate disclosures and encourages companies to use these channels to reach a wide audience. Companies should ensure their disclosures are accurate and complete, and that they adhere to their disclosure controls and procedures.
SEC’s Regulation Fair Disclosure
The Securities and Exchange Commission’s (SEC) Regulation Fair Disclosure (Reg FD) was implemented in October 2000 to provide equal access to material corporate information to all investors. The goal of the regulation is to prevent companies from selectively disclosing material information to certain investors or analysts, a practice known as selective disclosure.
Prior to Reg FD, companies were able to selectively disclose material information to a select group of market participants, such as analysts or certain institutional investors. This practice was considered unfair to the rest of the investing public, who did not have access to the same information. It also created an uneven playing field in the markets, as the select group of investors had an advantage in terms of access to the information.
Under Reg FD, companies must disclose any material information to the public in a timely manner. This means that companies are not allowed to selectively disclose material information to certain investors or analysts before making it public. Companies must use a method of disclosure that is widely available and accessible to all investors, such as issuing a press release, filing a Form 8-K with the SEC, or holding a conference call.
Reg FD has had a significant impact on the way companies communicate material information. Companies must now develop disclosure policies and procedures to ensure that all investors have access to the same information at the same time. Companies must also be careful not to inadvertently disclose material information to a select group of investors before it is made public.
Reg FD has been a positive development for investors, as it has leveled the playing field and provided all investors with equal access to material corporate information. It has also made companies more transparent and accountable to the investing public.
Overall, Regulation FD has had a positive impact on investor relations by increasing the transparency of the market and providing a level playing field for all investors. It has allowed investors to make more informed decisions and has given companies more incentive to be open and honest with their investors.
