What does the term “material information” refer to?

The term "material information" specifically refers to any information that could influence an investor's decision to buy or sell a security. This implies that if a piece of information were to be made public, it could affect the valuation of the security or the decision-making process of investors. Material information is critical in the context of securities law, particularly regarding insider trading regulations. The importance of this term in financial markets stems from the fact that it addresses the fairness and transparency in trading practices, ensuring all investors have access to crucial information before making investment decisions.

In contrast, options that refer solely to information for tax filings, widely known public information, or information disclosed by insiders do not capture the essence of "material information." These other types do not inherently possess the potential to influence market behavior or decision-making in the same way that material information does, which is why they do not accurately represent the term's definition in the context of securities regulation and investor relations.