Not government rules, but open competition. Competition, driven by consumer choice, is the key to abundance and variety in the marketplace both of goods and services and of ideas. They work to get information about corporations because that information plus subsequent judgments they draw from it gives them an edge over other analysts. It is the potentially asymmetrical nature of the distribution of information that triggers the competition from which, in fact, all investors benefit whether they are clients of the analyst with the initial edge or not. If information, by law, is relayed to all analysts and, in fact, to all citizens at the same time and in the same way, then the incentive for hard work by analysts declines sharply.
Less information comes out.
And small investors suffer. While the Internet offers the technology to make vast amounts of information about companies available to investors, the role of analysts remains critical. Raw numbers don t help most investors, who have a hard time telling an income statement from a balance sheet. More than ever, they need analysts to analyze, to tell them what the numbers mean and to ask corporate managers to find out. In addition, according to several surveys, Reg FD has led skittish companies simply to disclose less information.