A Memorandum of Understanding (MOU) “designed to assist the agencies in carrying out their respective missions of ensuring the integrity of the financial markets and protecting public health,” has been agreed by the SEC and FDA.
The MOU establishes a framework for the agencies to enhance cooperation among them “to improve market oversight and compliance” by creating “information-sharing protocols to facilitate the exchange of information.” It will remain in effect for three years, and it can be extended or modified by the mutual written consent of the agencies.
Acting FDA Commissioner Kyle Diamantas said in the SEC’s press statement that his agency is “proud to partner with the SEC to enhance transparency across the life sciences sector.”
“FDA-related disclosures by public companies have a significant impact on our markets,” said SEC Chairman Paul Atkins. “The FDA is a valuable partner in our efforts to administer and enforce applicable disclosure requirements under the federal securities laws, and I look forward to further strengthening our partnership through the MOU.”
The agreement
The main component of the MOU is this: “Each party intends to share appropriate information related to FDA-regulated products and activities, and persons and firms who manufacture, distribute, and sell FDA-regulated products, with the other party, where practicable.”
The SEC outlines how it will handle any non-public information it receives from the FDA, how it will share information with the FDA, and notes “it will continue its ongoing practice of obtaining assurances of confidentiality pursuant to customary access requests and grants.”
With limited exceptions, access to the shared non-public information will be restricted to “authorized FDA and SEC officials, employees, and contractors who require access to perform their official duties.”
As stated in the document, the MOU “is not for use in sharing public information, requesting testimony, or responding to a subpoena for records or testimony.” And it is only applicable as to requests for information made after the effective date (August 31, 2026) of the MOU.
The MOU notes situations when regulated entities publish false or misleading statements concerning FDA reviews, product approvals or clinical trial results, “or other matters within the FDA’s regulatory authority that could affect investors’ decisions.”
This gets at the heart of what the MOU is all about: Ensuring investors get disclosures and financial statement filings from businesses that do not contain potentially harmful inaccuracies, while also protecting the public health. The MOU does this by allowing the regulators to compare information disclosed to investors with information filed to the FDA.
To be sure, public announcements of clinical trial results and FDA approvals can cause share prices to go up or down, and any coordination between the agencies on how companies are characterizing them is an important aspect of their supervisory remit.