Financial Disclosure Agreement Template for the United States

A Financial Disclosure Agreement is a specialized legal contract that creates a framework for sharing confidential financial information between parties while maintaining strict compliance with federal securities regulations. When you need to exchange sensitive financial data for business purposes, this agreement ensures that all parties understand their obligations and protects against unauthorized disclosure or misuse of critical financial information.

When do you need this document?

You'll need a Financial Disclosure Agreement in various high-stakes financial situations. Investment banks require these agreements when conducting due diligence for mergers and acquisitions, allowing potential buyers access to target company financials while protecting confidential data. Publicly traded companies use them when sharing information with auditors, regulators, or potential partners to ensure compliance with Sarbanes-Oxley reporting requirements. Financial institutions employ these agreements when sharing customer data with third-party service providers or when collaborating on loan syndications. Investment firms need them when providing portfolio information to institutional investors or when engaging with regulatory bodies during examinations. Private equity firms use these agreements when sharing fund performance data with limited partners or when conducting due diligence on potential investments.

Key legal considerations

The scope of disclosure clause requires careful attention as it defines exactly what financial information will be shared and any limitations on access. Confidentiality obligations must be comprehensive, covering not just the primary recipients but also their employees, advisors, and affiliates who may access the information. Use restrictions should clearly specify permitted purposes for the disclosed information and explicitly prohibit trading on material non-public information to avoid securities violations. Return or destruction provisions ensure that confidential information is properly handled after the agreement terminates. Indemnification clauses protect against losses resulting from breaches of the agreement, while dispute resolution mechanisms provide clear procedures for addressing violations. Term and termination provisions should align with the underlying business purpose and include survival clauses for confidentiality obligations that extend beyond the agreement's expiration.

Legal requirements in United States

Under the Securities Exchange Act of 1934, any disclosure of material non-public information must comply with insider trading regulations and fair disclosure rules. The Sarbanes-Oxley Act requires specific controls over financial information disclosure, particularly for public companies sharing data with auditors or other third parties. The Dodd-Frank Act imposes additional disclosure requirements for financial institutions and mandates enhanced data protection measures. State laws may also apply, particularly regarding trade secrets and confidentiality protections that vary by jurisdiction. The Bank Secrecy Act requires financial institutions to implement specific safeguards when sharing customer information, even under disclosure agreements. Investment advisers must comply with the Investment Advisers Act when sharing client information, ensuring that disclosure agreements include appropriate consent mechanisms and privacy protections required under federal and state regulations.