Full Disclosure

AAA

DEFINITION of 'Full Disclosure'

1. The U.S. Securities and Exchange Commission's (SEC) requirement that publicly-traded companies release and provide for the free exchange of all material facts that are relevant to their ongoing business operations.

2. The general need in business transactions for both parties to tell the whole truth about any material issue pertaining to the transaction.

INVESTOPEDIA EXPLAINS 'Full Disclosure'

1. The SEC requires full disclosure from companies that wish to be publicly traded on the major U.S. exchanges. By enforcing this rule, the SEC attempts to instill confidence in investors that the financial marketplace is efficient and transparent so that individual investors can take part in it for material profit.

2. For example, in real estate transactions, there can often be a disclosure form that is signed by the seller. Signing this form can result in legal penalties if it is later discovered that the seller knowingly lied about or concealed significant facts.

RELATED TERMS
  1. Confidential Treatment Order - ...

    An order that provides confidential treatment for certain documents ...
  2. Securities And Exchange Commission ...

    A government commission created by Congress to regulate the securities ...
  3. Regulation Fair Disclosure - Reg ...

    A rule passed by the Securities and Exchange Commission in an ...
  4. Confidential Treatment Application

    A form filled out in accordance with a company's 8-K, 10-Q, ...
  5. Blue Sky Laws

    State regulations designed to protect investors against securities ...
  6. Disclosure

    The act of releasing all relevant information pertaining to a ...
RELATED FAQS
  1. What is meant by "full disclosure"?

    Most likely, the "full disclosure" you're talking about refers to rules put in place by the Securities and Exchange Commission ... Read Full Answer >>
Related Articles
  1. Fundamental Analysis

    Financial Footnotes: Start Reading The Fine Print

    Find out what could be hidden in this often-overlooked part of the financial statements.
  2. Active Trading

    Viewing The Market As Organized Chaos

    Find out how a cat and a ladybug prove markets are both random and efficient.
  3. Personal Finance

    Want To Know What Disclosures Mean ... In Plain English?

    Disclosures are the fine print in financial reports. We strip away the legal speak to tell you what they really mean.
  4. Economics

    The SEC: A Brief History Of Regulation

    The SEC has continued to make the market a safer place and to learn from and adapt to new scandals and crises.
  5. Markets

    5 Tricks Companies Use During Earnings Season

    Don't be fooled: Companies use all kinds of tactics to make bad earnings look good. Find out how to see through them.
  6. Active Trading

    What Would Full Disclosure Mean For The Market?

    In the wake accounting scandals, more people are calling for full disclosure. But what would that even help?
  7. Mutual Funds & ETFs

    The Impact of the Janus Market Timing Ruling

    A look at the impact of the Janus Supreme Court ruling on market timing.
  8. Options & Futures

    Get To Know These Crucial US Options Market Regulations

    How are options regulated in the U.S and which organizations are involved in options market regulations?
  9. Economics

    The Impact Of Ending The US Embargo On Cuba

    Many argue that ending the US embargo on Cuba will not only make US consumers happy, but also help the US economy and bring more freedoms to Cuba.
  10. Economics

    Popular Places Where U.S. Citizens Need A Visa

    A U.S. passport will get you into many countries, but not everywhere. Here's how to visit five of the most popular destinations that require visas.

You May Also Like

Hot Definitions
  1. Risk Averse

    A description of an investor who, when faced with two investments with a similar expected return (but different risks), will ...
  2. Fixed-Charge Coverage Ratio

    A ratio that indicates a firm's ability to satisfy fixed financing expenses, such as interest and leases. It is calculated ...
  3. Efficiency Ratio

    Ratios that are typically used to analyze how well a company uses its assets and liabilities internally. Efficiency Ratios ...
  4. Fixed Cost

    A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses ...
  5. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  6. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
Trading Center