Bloomberg News
WASHINGTON - A group of corporate executives has asked the Securities and Exchange Commission for a two-month postponement of a new rule that would bar the selective release of important company news.
"Many questions remain unanswered, and many concerns continue to be voiced," the National Investor Relations Institute, a group of company investor-relations executives, wrote in a letter Thursday to the SEC.
The institute, whose members work daily with securities analysts that follow their companies, asked the SEC to delay the starting date for the new rule to Dec. 29 from Oct. 23.
An SEC spokeswoman declined to comment.
Last month the SEC approved a rule that would bar companies from releasing market-sensitive information to favored Wall Street analysts before announcing it to the public. The rule would apply to discussions of profits, new products, and important news in private briefings with analysts and institutional investors.
The rule was supported by individual investors and SEC Chairman Arthur Levitt and opposed by brokerages and some corporate groups like the investor relations institute. The opponents argued that the rule would backfire by chilling the flow of information from companies to analysts and, ultimately, the public.
In the letter Thursday, Louis Thompson, president of the institute, said comments from 1,400 of his group's members showed that many companies would not have procedures set up in time to make public forecasts of quarterly profits.
"Until issuers have adequate time to develop and implement such procedures, it is likely that they will reduce the amount of information they make available to the market," he said.
Mr. Thompson also said the Oct. 23 effective date occurs in the middle of the announcement cycle for third-quarter earnings, making it hard for companies to properly draft announcements and prepare for analyst calls.
Margaret Foran, an executive with the Business Roundtable, a trade group of top executives, declined to comment on the request.
