NEW YORK, October 17, 2001 — After a year in place, the SEC’s Regulation Fair Disclosure is fulfilling its promise of fair and equal disclosure of companies’ financial information to the general public and industry analysts, according to top executives surveyed in the latest PricewaterhouseCoopers “Management Barometer,” released today. Nearly 90 percent of those surveyed said Regulation FD should be continued.  However, 68 percent said the SEC should issue specific guidelines about what information is “material” to companies and requires disclosure, and what is not “material.” Twenty-seven percent said such guidelines are not needed and five percent were not certain. Overall, 75 percent of those surveyed reported no impact on their company’s stock price from Regulation FD; 18 percent were uncertain, while seven percent noted a change.  Among this latter group, six percent said the regulation had a negative impact, and one percent a positive impact. More than 90 percent of those surveyed said Regulation FD increased fairness (46 percent) or provided about the same level of fairness as before to all analysts and investors (45 percent).  Only seven percent said it led to less fairness, and two percent were uncertain. This assessment extends evenly across industries and market cap sizes, and to investor relations and financial executives alike. “After a year’s experience, it appears Reg FD is increasing fairness for analysts and investors.  On balance, the key aspects of corporate disclosure are being improved,” said Frank Brown, global leader for Assurance and Business Advisory Services for PricewaterhouseCoopers. “But the call for specific SEC guidelines suggests a higher comfort level could be achieved.” Overall, 86 percent of executives said they have a good understanding of what can and cannot be done under Regulation FD, including 62 percent who understand the regulation “very well” and another 24 percent who understand it  “well.” Eighty-eight percent of executives said Regulation FD had a neutral (71 percent) or positive (17 percent) affect on their company.  Only 10 percent reported a negative impact; two percent were uncertain. Overall, 88 percent said Regulation FD should be continued; only 10 percent said it should be repealed, and two percent were uncertain. However, 42 percent of those in favor of continuing feel some changes are needed.  Among the changes mentioned were clarifying the rules for disclosure (37 percent), relaxing the rules (11 percent), and limiting penalties for violations (seven percent). More than a third (38 percent) said Regulation FD would be more effective if it had stronger Safe Harbor protections; though 53 percent said that such a provision would not change the effectiveness of the regulation.  Another three percent believes it would be less effective, and six percent was not certain.  Attributed Benefits Respondents said Regulation FD has favorably impacted company disclosures in several ways: Quantity or scope: 48 percent said regulation FD has influenced the quantity or scope of their disclosures -- 37 percent said they are disclosing more, and 11 percent are disclosing less--a net of 26 percent providing more information. Quality: 33 percent noted a change in the quality of their company’s disclosures -- 29 percent of higher quality, and four percent lower quality -- a net of 25 percent with higher quality disclosures. Frequency: 32 percent cited a change in the frequency of their company’s disclosures -- 23 percent more-frequently, and nine percent less-frequently -- a net of 14 percent, more often. Timing: 22 percent reported a change in the timing of their disclosures --15 percent disclosing sooner, five percent later -- a net of 10 percent disclosing sooner. Since the advent of Regulation FD, 62 percent of those surveyed have allocated the same relative importance to quarterly earnings announcements.  However, these announcements have become more important to 36 percent; and less important to only two percent, a net of 34 percent more important. And while 74 percent saw no change in off-balance sheet information reported by their company, 23 percent reported more, versus only two percent, less, a net of 21 percent, more. “It is encouraging to see that many companies that have altered their disclosure practices have changed in the direction of greater transparency,” Brown noted.  “Providing more information to stakeholders is one way companies can differentiate themselves from their competitors and add value for their investors.” Concerns The two major concerns about Regulation FD focus on added costs (cited by 51 percent) and higher litigation risk (41 percent).  A third, but much lesser concern is that of greater company stock price volatility (19 percent).  Each was cited by over three-fifths of those negative about Regulation FD.  Incremental costs: Among the 51 percent citing increased costs, 47 percent said these costs are low to moderate, and four percent felt the costs are high.  In contrast, 48 percent had not incurred added costs.  Risk of litigation: 41 percent feel the risk of litigation is higher than before Reg FD; nine percent feel it is lower. Volatility of company’s stock price: Overall, 74 percent reported no impact on the volatility of their company’s stock price due, in part, to greater volatility caused by other factors; 19 percent attribute more volatility to Regulation FD; one percent, less volatility.   “Overall, the benefits of Regulation FD seem to outweigh the concerns,” Brown said. “Despite the dire predictions of the securities industry, the overall impact of regulation FD has not been onerous, but the risk of litigation clearly bears watching.” Charts and graphs of survey data, as well as information about Barometer surveys, including recent economic trend data and topical issues, are available at:   www.barometersurveys.com.  Direct questions to Pete Collins, survey director and publisher, at 646-394-4496 or e-mail to: pete.collins@us.pwcglobal.com.  PricewaterhouseCoopers’ “Management Barometer” is developed and compiled with assistance from the opinion and economic research firm of BSI Global Research, Inc. PricewaterhouseCoopers’ new “Management Barometer” is developed and compiled with assistance from the opinion and economic research firm of BSI Global Research, Inc. PricewaterhouseCoopers (www.pwcglobal.com) is the world’s largest professional services organization.  Drawing on the knowledge and skills of more than 150,000 people in 150 countries, we help our clients solve complex business problems and measurably enhance their ability to build value, manage risk and improve performance in an Internet-enabled world. PricewaterhouseCoopers refers to the member firms of the worldwide PricewaterhouseCoopers organization.