Although the agreement need not include an undertaking not to trade on the information, the regulation was heavily driven by a desire to make it easier to prosecute recipients of selective information for insider trading, because in many instances only persons who owe such a duty are subject to such prosecution.
Thus, the SEC explained in the Proposing Release: "To make clear the scope of the Regulation, paragraph (b) of Rule 100 expressly states that the Rule does not apply to disclosures of material information to persons who are bound by duties of trust or confidence not to disclose or use the information for trading.
On April 2, 2013, the Securities and Exchange Commission said companies can use social media to disseminate information if certain requirements are met.
[6] The rule only applies to certain groups such as securities market professionals and shareholders, which allows the company to continue providing necessary information to business partners.
Most investors relied primarily upon full service brokers, such as Merrill Lynch, for trading advice.
Large institutional investors, accustomed to benefiting from selectively disclosed material information, fought vigorously against the proposed regulation.