SEC Looks at Fair Disclosure, Volatility

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Federal securities regulators are examining whether rules aimed at ensuring fair disclosure of important company information are adding to market volatility following the Sept. 11 attacks by hijacked jetliners.

Securities and Exchange Commission Chairman Harvey Pitt told lawmakers that the underlying principle of the fair disclosure rules, that no one should have an unfair advantage, was ``unassailable.''

``The issue is however... whether in operation, the rule is having untoward effects,'' Pitt told the House Financial Services Committee, ``and in connection with the events of Sept. 11, the concern would be to make certain that the rule doesn't contribute to market volatility.''

He said the SEC was trying to come up with some hard data on whether the rule was adding to volatility.

Many big Wall Street firms have complained that the fair disclosure rules, implemented last October to put small investors on an equal footing, have restricted their access to detailed company information.