All for one, one for all on disclosures

One of the funnier stories in recent weeks has been the vocal fears expressed in the US that new rules on disclosure will lead to greater volatility in the marketplace. The Securities and Exchange Commission, the stock exchange watchdog, has ruled that companies will no longer be allowed to brief analysts in private. Any information that might affect the market will have to be released to the general public.

So what, you ask? Both listed companies and the fund managers who often receive such briefings argue that the existing practice merely ensures more accurate forecasts and less turbulence or nasty surprises. Adopting the new regime put forward by SEC chairman Arthur Levitt, they say, will lead to more volatility as investors sell and buy more wildly as information becomes more unreliable and the capacity for market shocks greater.

Let's get this straight . . . giving all the investors the same information at the same time will undermine the market. I think not. For if that were so, it would imply either that the existing arrangement has led to market management by the few at the cost of the many, which is unthinkable or that companies would not release any information to anyone, which would be self-defeating in the long run.

Dominic Coyle can be contacted at dcoyle@irish-times.ie