Executives Want SEC to Delay Rule on Releases

A group representing corporate executives has asked the Securities and Exchange Commission for a two-month postponement of a new rule that is to bar selective release of important company news.

The National Investor Relations Institute, whose members work on a daily basis with securities analysts who follow their companies, asked the SEC to delay the starting date for the new rule to Dec. 29 from Oct. 23, saying “many questions remain unanswered.”

SEC officials said they would think about the NIRI request.

Last month, the SEC approved a rule that bars companies from releasing market-sensitive information such as earnings reports or new product news to favored Wall Street analysts before announcing it to the public.

The rule, which has broad support from individual investors, was opposed by the NIRI, the Securities Industry Assn.--which represents brokerage firms--and some other business groups. They argued that the rule would backfire by chilling the flow of information from companies to analysts and, ultimately, the public.

The new rule calls for companies to release market-sensitive news in a news release, in materials filed with the SEC, or possibly in an Internet broadcast. It would not let companies simply post the news on their Web sites. Companies now sometimes provide news to favored analysts in one-on-one conversations, conference calls or closed-door meetings. Analysts can then potentially tip off institutional clients.