Regulation Fair Disclosure and the Private Information of Analysts

Abstract

This paper reports evidence that Regulation Fair Disclosure has had its desired effect of reducing selective disclosure of information about future earnings to individual analysts without reducing the total amount of information disclosed. In particular, it finds that multi-forecast days, which typically follow public announcements or events, now account for over 70 percent of the new information about earnings, up from 35 percent before Reg FD. This result is obtained by applying a new methodology from Zitzewitz (2001a) for measuring the information content of individual forecasts. These results are strongest for the fourth quarter of 2000, when the SEC Chairman who introduced Reg FD was still in office; since the change in administration, some of the initial effects of Reg FD appear to have been reversed.