How Is the “Significant Effect on Price” Threshold Determined in Practice?

The "significant effect on price" is not defined by a fixed percentage but is assessed on a case-by-case basis by regulators. It involves analyzing the market reaction immediately following the information's public disclosure.

If the price movement is substantially greater than typical market fluctuations and is clearly attributable to the new information, the threshold is considered met. Regulators look at the size, nature, and reliability of the information and its impact on the average investor's decision.