Materiality: Relevant Laws, Guidance, and Determination Guidelines


This practice note discusses the primary laws and guidance relevant to the concept of “materiality” under the federal securities laws, as well as factors to consider when determining whether information is material under such laws. Materiality is an “inherently fact-specific finding” that involves assessing whether the information in question would be considered significant by a reasonable investor in making investment decisions. As discussed below, courts and the U.S. Securities and Exchange Commission (SEC) have explicitly rejected formulaic approaches to assessing materiality and require that such determinations be made on a case by case basis based on the “total-mix” of available information.