What is the aim of the principle of disclosure in securities regulation?

• A. To ensure maximum profitability for investors
• B. To provide full, true, and plain disclosure of material facts
• C. To simplify the investment processes for clients
• D. To facilitate rapid trading in the stock market

Answer: (B)

The aim of the principle of disclosure in securities regulation is fundamentally centered on the need for transparency in the financial markets. This principle mandates that companies provide full, true, and plain disclosure of material facts to potential investors. By doing so, it allows investors to make informed decisions based on accurate and comprehensive information about the financial health and operations of a company.

This disclosure includes crucial information such as financial statements, management outlook, and any risks that could impact an investment. The principle of disclosure helps to level the playing field, ensuring that all investors have access to the same essential information, thus fostering trust and confidence in the securities markets. It plays a vital role in mitigating misinformation and reducing the potential for fraud, ultimately creating a more stable investment environment.

In contrast, the other options reflect goals that are either too broad or not aligned with the primary focus on transparency and informed decision-making that the principle of disclosure embodies.