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If investors have enjoyed the past four weeks of earnings warnings from companies poised to disappoint Wall Street, they're going to love life in the world of full disclosure.

Beginning Oct. 23, the

Securities and Exchange Commission's

full-disclosure regulation will prohibit companies from giving important information to a select few, most often favored analysts and investors. But

Reg FD

, as it's known, will mean more than a wave of Webcasts open to individual investors.

It will mean, perhaps more significantly, that the government may have achieved the old standard of addition by subtraction. Like nuns at the school dance, the SEC wants to see a little light between public companies and the analysts who cover them.

Traditions Die Hard

Until then, however, it's good to see companies such as


(MSFT) - Get Microsoft Corporation Report

, for example, sticking to some time-honored traditions. Last month the company "held a small luncheon

in San Francisco for both buy- and sell-side accounts" to discuss topics such as the status of

Windows 2000

, according to a Sept. 19 note from

Thomas Weisel Partners

. It was nice of them to feed the chosen few -- How was the salmon? Wish we could've been there.

TheStreet Recommends

Microsoft notes that it has held plenty of Webcasts and posts on its Web site transcripts of meetings with analysts. A spokeswoman also says the company doesn't expect to significantly change the way it operates after Reg FD goes into effect.

Chuck Hill, director of research at

First Call/Thomson Financial

says the regulation already may be having some effect in earnings season. "None of us can remember the last time


(AA) - Get Alcoa Corporation Report

preannounced," Hill says. "Was it a coincidence or was it FD-related?"

More Surprises

Still, Hill says for the quarter that recently ended, earnings guidance also has been doled out in traditional ways. And while Hill says he's spoken to companies considering midquarter conference calls to provide some open discussion of business conditions, there are also likely to be more earnings surprises early if firms don't adopt such practices.

"Too many analysts are trying to be the first guy to get out of a company whether it's going to make its earnings," he says. Reg FD may make standard Wall Street research "somewhat more long-term oriented." That means analysts won't get private midcourse meetings with management to discuss earnings, the kind of


that provides enough insight to adjust quarterly estimates and dampen the chance for a late-stage surprise.

"The biggest change will be that it makes analysts' jobs more difficult," agrees Michael Rosenbaum, president of investor relations firm

The Financial Relations Board


Pulling the Plug

One manager of a small mutual fund says he's grown a little tired of seeing a stock down 15% for no apparent reason one day, followed by some kind of news release the day after. Now some institutional investors who have been spoiled by the perk of additional insight will be reduced to the actual grunt work of running models and talking to people on the Street, left in the dark because the plugged-in analysts have been disconnected.

To be sure, even without getting access to information before the rest of the world, analysts still have plenty of conflicts to deal with, like those pesky little connections to investment banking, or the business of stock offerings and mergers and acquisitions. Increasingly, the basis of analysts' compensation has swung from research to their ability to attract potential investment banking deals, a Wall Street business that has managed to maintain juicy profit margins.

Reg FD, however, can't address that factor. But it will keep vital information from reaching some investors and analysts before others, primarily whispers about quarterly earnings and the dramatic price swings those numbers can initiate.

"This really underscores the importance of the role the commission thinks analysts serve," says Paul Gerlach, a partner at

Sidley and Austin

and a former SEC deputy enforcement director. "And maybe that role had evolved to something not as healthy as it should be. This rule gives a little bit of distance."

In the case of disclosure, a little bit of distance is as good a start as investors can expect.