Download or read book Fair Markets and Fair Disclosure written by Adam O. Emmerich and published by . This book was released on 2014 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: In March 2011, our law firm (Wachtell, Lipton, Rosen & Katz) formally petitioned the Securities and Exchange Commission to modernize the rules promulgated under Section 13(d) of the Securities Exchange Act of 1934. The petition sought to ensure that the reporting rules would continue to operate in a way broadly consistent with the statute's clear purposes, and that loopholes that have arisen by changing market conditions and practices since the statute's adoption over forty years ago could not continue to be exploited by acquirers, to the detriment of the public markets and security holders. Among other things, the petition proposed that the time to publicly disclose acquisitions of over 5% of a company's stock be reduced from ten days to one business day, given investors' current ability to take advantage of the ten-day reporting window to accumulate positions well above 5% prior to any public disclosure, in contravention of the clear purposes of the statute. In their article The Law and Economics of Blockholder Disclosure, Professors Lucian A. Bebchuk and Robert J. Jackson Jr. challenge the need for any modifications to the ten-day reporting window. Bebchuk and Jackson argue that, given the purported benefits of blockholder accumulations, extensive cost-benefit analysis should be done before Section 13(d)'s reporting rules are modified. We argue that Bebchuk and Jackson offer no sound basis for the cost-benefit analysis they suggest nor any reason to question the need for the modernization of Section 13(d)'s reporting rules proposed in the petition. Specifically, we explain that Bebchuk and Jackson's position follows largely from an erroneous interpretation of the statute's legislative history and that the blockholder interests for which they advocate run directly contrary to Section 13(d)'s underlying purpose - “to alert the marketplace to every large, rapid aggregation or accumulation of securities.” We also discuss how developments in market liquidity and trading - which allow massive volumes of public company shares to be traded in fractions of a second - have made the Section 13(d) reporting regime's ten-day reporting window obsolete, allowing blockholders to contravene the purposes of the statute by accumulating vast, control-implicating positions prior to any disclosure to the market. Finally, we explain how corporate governance developments since the passage of the Williams Act offer no reason to fail to update Section 13(d)'s reporting rules. To the contrary, we note that the blockholder reporting rules in other major capital markets jurisdictions only confirm the need to modernize the Section 13(d) reporting regime to ensure that it once again fully achieves the statute's express purposes.
Download or read book Fair Disclosure Or Flawed Disclosure written by United States. Congress. House. Committee on Financial Services. Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises and published by . This book was released on 2001 with total page 182 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Regulation Fair Disclosure and Market Volatility written by Bradley Wilkin and published by . This book was released on 2012 with total page 60 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Regulation Fair Disclosure and Earnings Information written by Warren Bailey and published by . This book was released on 2014 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: With the adoption of Regulation Fair Disclosure (Reg FD), market behavior around earnings releases displays no significant change in return volatility (after controlling for decimalization of stock trading) but significant increases in trading volume due to difference in opinion. Analyst forecast dispersion increases, and increases in other measures of disagreement and difference of opinion suggest greater difficulty in forming forecasts beyond the current quarter. Corporations increase the quantity of voluntary disclosures, but only for current quarter earnings. Thus, Reg FD seems to increase the quantity of information available to the public while demanding more effort and struggle from investment professionals.
Download or read book Regulation Fair Disclosure written by Peter F. Goodman and published by . This book was released on 2007 with total page 58 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Fair Disclosure and Investor Asymmetric Awareness in Stock Markets written by Zhen Liu and published by . This book was released on 2009 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt: The notion of awareness is introduced to study Regulation Fair Disclosure, a rule implemented by the U.S. Security and Exchange Commission in 2000. The regulator aims to reduce information asymmetry among investors, and expects public forums to subsume the forbidden information channel of selective forums. We show that even with cooperative managers and effective technology, this is only possible under the assumption of symmetric awareness. If a professional investor is aware of more uncertainties than others are, lacking the incentive to share the insights, he would not raise critical questions and acquire relevant information at public forums. This leads to inefficient information production. We also analyze the market prices and investors' welfare under different disclosure forms and awareness assumptions. At last, we discuss the implications of asymmetric awareness on the overall benefit and cost, the empirical findings, and the policies of the regulation.
Download or read book Fair Disclosure and Insider Trading Reforms written by James Hamilton and published by . This book was released on 2000 with total page 108 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Effect of Regulation Fair Disclosure on Market Integration written by Surya Chelikani and published by . This book was released on 2014 with total page 20 pages. Available in PDF, EPUB and Kindle. Book excerpt: The recent market crises have focused interest on methods to improve the functioning of financial markets. Before implementing new regulations, it is necessary to evaluate the effects of previous regulations. Regulatory changes such as Fair Disclosure have an effect on information dissemination and price discovery. This paper uses the information share of individual markets, to measure changes in the information contribution of markets before and after implementation of Regulation Fair Disclosure. Most of the existing studies focus on the price discovery process and the information contribution or share of the individual markets. This paper uses this information share as a metric to test the effect of a particular regulation. Employing cointegration analysis, this study measures the changes in the information share, impulse response functions, and tests whether Regulation Fair Disclosure has achieved its intended goal of greater informational parity and market integration. Results show that Fair Disclosure has increased the information share of satellite markets and achieved greater market integration.
Download or read book Market Adaptation to Regulation Fair Disclosure written by Susana Yu and published by . This book was released on 2015 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt: Our fundamental research question is in understanding ways in which the financial markets have adapted to Reg FD, and our particular focus is on how market participants use industry information embedded in firms' earnings announcements. We find that announcements of quarterly earnings made by companies that are the first in their industry to report earnings in a given quarter have significant effects on the stock returns of other firms in the same industry as well as on their own stock returns. We then test the implications of these findings for their effects on the information environment. Overall, our empirical findings support the conclusion that the implementation of Reg FD has led to increased use of industry information that is revealed in earnings announcements. This is one way, among others, in which analysts and other market participants have adapted to the requirements of Reg FD. In this case, they have made the adaptation by developing new uses of public information to enhance the informational environment.
Download or read book Market Reaction to the Securities and Exchange Commission s Adoption of Regulation FD Fair Disclosure written by William G. Cummings and published by . This book was released on 2006 with total page 412 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Regulation Fair Disclosure and Capital Structure written by Rei-Ning Chen and published by . This book was released on 2009 with total page 71 pages. Available in PDF, EPUB and Kindle. Book excerpt: Abstract: This study examines the impact of Regulation Fair Disclosure (FD) on corporate financing choices. Regulation FD puts more constraints on corporate disclosure in the equity market than in the debt market. After the regulation, although firms are no longer able to selectively disclose material information to market professionals in the equity market, they can still do so to banks and rating agencies in the debt market. Consistent with the expectation that FD affects firms differentially, I find substantial cross-sectional variation in changes in information asymmetry in the equity market. I further find that firms experiencing greater increases in information asymmetry increase their leverage more after FD. The results suggest that firms who cannot perfectly replace private disclosure with public disclosure are likely to experience increases in information asymmetry and that they may turn to the debt market for capital where private disclosure is still available.
Download or read book Fair Disclosure Or Flawed Disclosure written by United States. Congress and published by Createspace Independent Publishing Platform. This book was released on 2018-01-05 with total page 172 pages. Available in PDF, EPUB and Kindle. Book excerpt: Fair disclosure or flawed disclosure : is Reg FD helping or hurting investors? : hearing before the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises of the Committee on Financial Services, U.S. House of Representatives, One Hundred Seventh Congress, first session, May 17, 2001.
Download or read book Regulation Fair Disclosure and the Cost of Adverse Selection written by Baljit K. Sidhu and published by . This book was released on 2012 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: Regulation Fair Disclosure (FD), imposed by the Securities and Exchange Commission in October 2000, was designed to prohibit disclosure of material private information to selected market participants. The informational advantage such select participants gain is unclear. If multiple ldquo;insidersrdquo; receive identical information, private information is immediately incorporated in price and each insider has zero expected profit. If, on the other hand, Regulation FD has curtailed the flow of information from firms, private information becomes longer-lived and more valuable. Hence, market makers will demand increased compensation by widening the adverse selection component of the bid-ask spread. We identify the cost components of the bid-ask spread for a sample of NASDAQ stocks surrounding the implementation of Regulation FD. Controlling for other factors affecting the spread, we find that adverse selection costs increase approximately 36% after Regulation FD. We interpret our finding as Regulation FD failing to achieve one of its desired objectives.
Download or read book Impact of Regulation Fair Disclosure on Corporate Communications with Investors written by Shalini Jhalani and published by . This book was released on 2004 with total page 250 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book SEC Regulation Fair Disclosure Information and the Cost of Capital written by Armando R. Gomes and published by . This book was released on 2004 with total page 76 pages. Available in PDF, EPUB and Kindle. Book excerpt: We empirically investigate the effects of the adoption of Regulation Fair Disclosure ( Reg FD') by the U.S. Securities and Exchange Commission in October 2000. This rule was intended to stop the practice of selective disclosure,' in which companies give material information only to a few analysts and institutional investors prior to disclosing it publicly. We find that the adoption of Reg FD caused a significant reallocation of information-producing resources, resulting in a welfare loss for small firms, which now face a higher cost of capital. The loss of the selective disclosure' channel for information flows could not be compensated for via other information transmission channels. This effect was more pronounced for firms communicating complex information and, consistent with the investor recognition hypothesis, for those losing analyst coverage. Moreover, we find no significant relationship of the different responses with litigation risks and agency costs. Our results suggest that Reg FD had unintended consequences and that information' in financial markets may be more complicated than current finance theory admits.
Download or read book A Study on the Relation Between Fair Disclosure and Investors Emotions with the Market Experiments Does Fair Disclosure Affects Investors Emotions written by Satoshi Taguchi and published by . This book was released on 2009 with total page 9 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Purpose of this paper is to consider the relation between fair disclosure of accounting information and investors' emotions. In this paper, we test a hypothesis by stock market experiments. It is the hypothesis about the relation between fair disclosure of accounting information and investors' emotions: in particular, whether investors would be anger when accounting information is released in public.Our market experiments proved this hypothesis. The result shows that fair disclosure of accounting information is not always desirable for investors. The results of these experiments will change the direction of the entire study of fair disclosure of accounting information.
Download or read book The Impact of Regulation Fair Disclosure written by Kumar Venkataraman and published by . This book was released on 2002 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: Recently, the Securities and Exchange Commission (SEC) passed a new rule, known as Regulation Fair Disclosure (Reg. FD), that prohibits selective disclosure of material information to analysts and other investment professionals. Both proponents and critics, in emphasizing different aspects of the information environment, have offered logical support for their views. Our study is designed to clarify the empirical impact of this new regulation on trading costs and, by inference, on the degree of information asymmetry extant in the equity markets. In brief, we find no evidence to suggest that Reg. FD has caused asymmetry to increase. On the contrary, our measures of trading costs suggest that the risk of adverse selection during information events has reduced significantly after the introduction of Reg. FD. In addition, we find some evidence that the SEC appears to be successful in accomplishing its objective of preventing select investors from gaining preferential access to material information before information events. In a cross-section, our analysis suggests that the more illiquid firms obtain, relatively, a greater benefit from this reduction in trading costs.Finally, our analysis of market model residuals and announcement period return prediction errors provides no support for the contention that Reg. FD increases return volatility and exaggerates price reactions to announcements. If anything, the data suggest that information flow around mandatory announcements has decreased but overall information flow is unchanged.
