Regulation FD and Voluntary Disclosure

Regulation FD (Reg FD) was designed to change the disclosure landscape by "leveling the playing field" through ensuring equal access to material information for all investors. We investigate the impact the regulation has had on firms' voluntary disclosure practices. We find substantial increases in both the number of management forecasts and 8-Ks coincident with Reg FD. There was a significant shift from Closed to Open conference calls during the 1999-2001 sample period. However, this shift appears to be related to previous trends and is unlikely to be due primarily to Reg FD. We find that average disclosure quality, as measured by disclosure day stock volatility, has significantly declined after Reg FD. This finding is consistent with firms reducing the proprietary costs associated with the public disclosure of information that they had selectively disclosed prior to Reg FD. Additionally, the average voluntary disclosure conveys significantly less negative information after Reg FD.