Template:M summ nda disclosure to regulators

There are times in the life of a regulated institution when it must open its kimono to those with the power to police it. These might be prudential regulators, competition and antitrust authorities, parts of the market infrastructure, courts, and, well, the police.

It really should go without saying that one may disclose information one is, in any case, legally obliged to disclose; there are grey areas of course: what if the information is requested but not demanded, or where there is no available power of compulsion? What happens to the information once the regulator has it? Is it still confidential?

The JC starts with the pragmatic observation that competent regulators of any kind mean well, are there for our collective good, and that disclosing information to them shouldn’t in the ordinary course, do any violence to the commercial principles of confidentiality (namely, protecting the commercial value of the information disclosed). “Pragmatic” because, whether or not this is true, there is not much we can do about it. So our starting point is that one should define “regulators” widely, not stand on ceremony, be able to provide information to regulators on request, without fuss, without, informing the discloser, much less assisting it in its efforts to stymie what we presume is a bona fide motivation for disclosure, and that yes, the information absolutely should remain confidential as far as it is in the recipient’s hands, or those of its voluntary disclosees.

There are nefarious regulators, to be sure, and there are certainly careless or stupid ones, and if they lose, or wantonly broadcast that information it would be a shame, but should not really be the recipient’s problem.

Practically we would note that such incidences of regulatory indiscretion are rare — we have not heard of one — and the likely diminution in commercial value as a result rarer still. Most “confidential information” really isn’t have as special as its discloser would have you believe. The NDA process is, largely, a pantomime, that is to say.