Do You Have a Realistic Quiet Period Policy?
For publicly traded companies, there are two types of “quiet periods”: First, there’s the heavily regulated, post-IPO period when a company cannot talk about its aims and earnings. Second, there’s the quiet period at the end of each quarter when companies stop communicating with Wall Street once they begin to get a handle on the quarterly results. While this second type isn’t regulated, it is still important to have a defined policy governing this quiet period to both guide your external communications practices (especially with analysts and investors) and to remain in compliance with Reg FD.
Quiet periods have no standardized length. These quarterly periods end, of course, with the earnings conference call and/or press release; but it’s up to each particular company to determine when they begin. Constructing the optimal quiet period will vary, depending on how quickly earnings are determined, as well as how experienced executives are with analyst and investor interactions. Following are some suggestions to help guide your company’s activities as they relate to quiet periods.
Quiet period “don’ts”
- Don’t make exceptions. Quarterly quiet periods received more attention after the enactment of Regulation FD, which prohibits companies from appearing to favor one analyst or investor over another. Once the policy is set, do not make exceptions for anyone. The most important strategy is to make sure you communicate with all audiences consistently and share the same information. Continue Reading
