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IR and communications
furnishing a Current Report on Form
8-K or by disseminating the information
through a method or combination of
methods that is “reasonably designed
to provide broad, non-exclusionary
distribution of the information to the
public.” The most common method is
by press release. If the company wishes
to make public disclosure of material
nonpublic information by means of a
conference call or webcast, it must give
adequate public notice, including the
date, time, subject matter and dial-in
information for the call. Disclosure at
a shareholders’ meeting, even one that
is open to the public, is not sufficient if
the meeting is not webcast or broadcast
by electronic means, and the presence
of the press at an otherwise nonpublic
meeting does not render the meeting
public. Posting information to the
company website or use of social media
is also permitted if the company regularly
uses the website or other media for that
purpose and the company alerts the
market to the distribution channel it
plans to use and the information it may
disclose through the channel.
The SEC has aggressively investigated
cases under Regulation FD, resulting in
several enforcement proceedings. SEC
personnel have indicated that they look
for egregious violations involving the
intentional or reckless disclosure of
unquestionably material information.
The enforcement actions also confirm
that the SEC will look to market reaction
as an indicator of the materiality of
selective disclosure. One significant
similarity among the enforcement
actions is that visible and sometimes
dramatic changes in stock trading price
and volume occurred in the aftermath
of the selective disclosures, and the
SEC has stated that a very significant
market reaction to selectively disclosed
information requires public disclosure of
that information.
Non-GAAP financial measures: Special
disclosure rules apply when the company
presents certain financial information in
a way that is different from the financial
statement presentation under GAAP.
Use of non-GAAP financial measures in a
public statement (whether written or oral)
is subject to Regulation G, which requires
that the disclosure be accompanied
by a presentation of the most directly
comparable GAAP financial measure and
a quantitative reconciliation (by schedule
or other clearly understandable method)
of the two measures. More stringent
requirements apply if the company uses
non-GAAP financial measures in a report
filed with the SEC or in an earnings release,
and some non-GAAP financial measures
are not permitted in filed reports.
The following are some practical
guidelines for a company’s communications
with the market:
• Designate one company executive to
communicate with analysts.
• Make each presentation to analysts on
the basis of a prepared text that has
been reviewed by senior executives and
by counsel.
• Do not disclose material nonpublic
information to analysts unless the
information is disclosed to the public
at the same time; this can be done by
permitting the public, on reasonable
advance notice, to participate in
any call with analysts during which
material nonpublic information may be
discussed.
• Refrain from responding to analysts’
inquiries in a nonpublic forum unless
the company is certain that the
response does not include material
nonpublic information.
• If asked about a matter that has not
previously been disclosed, simply say,
“No comment.”
• If requested by an analyst to review
a research report, do not comment
except to correct errors of fact. Do not
comment in any way on an analyst’s
forecasts or judgments, including by
saying you are “comfortable” with
them, that they are “in the ballpark”
or other words to similar effect. To
avoid entanglement, be cautious
about distributing analysts’ reports or
including hyperlinks to them on the
company’s website
• Avoid favoring one analyst over
another.
• Review public statements to identify
any non-GAAP financial measures. To
avoid the need to reconcile non-GAAP
financial measures in presentations
given orally, telephonically, by webcast
or broadcast or by other similar
means, provide the most directly
comparably GAAP financial measure,
with the required reconciliation, on
the company’s website and include
the location of the website in the
presentation. Written materials
(whether distributed electronically or
in hard copy) must include the most
directly comparable GAAP measure and
the required reconciliation.
• Do not make specific forward-looking
statements, unless:
• you set out the assumptions on
which the forecast is based;
• you indicate the factors that could
prevent the forecast from being
realized (both this and disclosure
of the assumptions can be done by
referring to a filed document that
contains the relevant information);
• you make the statements to the
public at the same time; and
• you are always prepared to evaluate
the need to update the statement
when circumstances change.
5.5 Market intelligence and surveillance
Ipreo
Sections 5.5 through 5.8 cover a group
of advisory services and tools that allow
investor relations officers to stay informed
of ongoing market activity and perceptions,
access the most detailed information
possible on investment community
participants, effectively implement an
investor relations strategy to prospect for
new investors, manage interactions with
the investment community efficiently
and measure the success of their investor
relations efforts. These services and tools
are used widely by investor relations
officers individually and collectively at
listed companies around the world.
Once a company successfully
completes the IPO process and begins
trading in the secondary market,
information regarding that trading and the
ownership changes that result are difficult
to come by in the absence of a market
intelligence and surveillance program.
A market intelligence and surveillance
program should act as a company’s eyes
and ears to the investment market and
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