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Regulation Fair Disclosure
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Book Synopsis SEC Regulation Fair Disclosure, Information, and the Cost of Capital by : Armando R. Gomes
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.
Author :United States. Congress. House. Committee on Financial Services. Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises Publisher : ISBN 13 : Total Pages :166 pages Book Rating :4.0/5 ( download)
Book Synopsis Fair Disclosure Or Flawed Disclosure by : United States. Congress. House. Committee on Financial Services. Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises
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 166 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Regulation Fair Disclosure and the Cost of Adverse Selection by : Baljit K. Sidhu
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.
Book Synopsis Fair Disclosure and Insider Trading Reforms by : James Hamilton
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:
Book Synopsis Regulation Fair Disclosure and Information Asymmetry by : Vesna Straser
Download or read book Regulation Fair Disclosure and Information Asymmetry written by Vesna Straser and published by . This book was released on 2002 with total page 62 pages. Available in PDF, EPUB and Kindle. Book excerpt: With the institution of Regulation Fair Disclosure (FD) on October 23, 2000, the Securities and Exchange Commission (SEC) imposed higher transparency requirements on the voluntary disclosure practices of public companies. This paper investigates whether the regulation induced companies to commit to higher or lower levels of voluntary disclosures by studying the changes in information asymmetry. The analysis is based on the extant economic theory suggesting that increases in the quantity and/or quality of disclosures should reduce companies' levels of information asymmetry. We study two proxies of information asymmetry - the probability of informed trading and the adverse selection component of the spread. After the implementation of Regulation FD we find a significant increase in both proxies of information asymmetry and the probability of new information events that contain private information while the proportion of informed traders decreases. An analysis of the volume of disclosures shows that the regulation was successful in increasing the quantity of available public information. Combined with the previous results we are able to conclude that, at least initially, companies responded to the regulation by providing more public information of lower quality.
Book Synopsis Regulation Fair Disclosure Revisited by : United States. Securities and Exchange Commission
Download or read book Regulation Fair Disclosure Revisited written by United States. Securities and Exchange Commission and published by . This book was released on 2001 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Market Reaction to the Securities and Exchange Commission's Adoption of Regulation FD (Fair Disclosure) by : William G. Cummings
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:
Book Synopsis Externalities of Disclosure Regulation by : Michael J. Crawley
Download or read book Externalities of Disclosure Regulation written by Michael J. Crawley and published by . This book was released on 2014 with total page 64 pages. Available in PDF, EPUB and Kindle. Book excerpt: We use Regulation Fair Disclosure (REG FD) to examine a relatively neglected but important effect of disclosure regulation: externalities. REG FD applies to all publicly traded U.S. firms, but foreign firms cross-listed on U.S. stock exchanges are explicitly exempt. Despite the exemption, we find that many cross-listed firms voluntarily adopt REG FD as part of their disclosure policies. We hypothesize that REG FD imposes two externalities on cross-listed firms. First, following REG FD, previously disadvantaged U.S. investors have a lower demand for shares of cross-listed firms that continue to follow a selective disclosure policy. Second, REG FD creates an information spillover effect on cross-listed firms whose receipt of information is positively correlated with that of U.S. firms. We find evidence of both effects in cross-listed firms' voluntary REG FD adoption decisions. Relative to non-adopters, cross-listed firms who voluntarily adopt REG FD exhibit a significant reduction in the information asymmetry component of cost of capital and are also more likely to switch to open disclosure post REG FD. These results suggest that cross-listed firms' voluntary REG FD adoption represents a credible commitment to increased disclosure transparency.
Book Synopsis Regulation Fair Disclosure and the Private Information of Analysts by : Eric Zitzewitz
Download or read book Regulation Fair Disclosure and the Private Information of Analysts written by Eric Zitzewitz and published by . This book was released on 2002 with total page 47 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper reports evidence that Regulation Fair Disclosure has had its desired effect of reducing selective disclosure of information about future earnings to individual analysts without reducing the total amount of information disclosed. In particular, it finds that multi-forecast days, which typically follow public announcements or events, now account for over 70 percent of the new information about earnings, up from 35 percent before Reg FD. This result is obtained by applying a new methodology from Zitzewitz (2001a) for measuring the information content of individual forecasts. These results are strongest for the fourth quarter of 2000, when the SEC Chairman who introduced Reg FD was still in office; since the change in administration, some of the initial effects of Reg FD appear to have been reversed.
Book Synopsis Regulation Fair Disclosure and Capital Structure by : Rei-Ning Chen
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.
Book Synopsis The Regulation of Corporate Disclosure by : James Robert Brown
Download or read book The Regulation of Corporate Disclosure written by James Robert Brown and published by Wolters Kluwer. This book was released on 1999-01-01 with total page 1709 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Regulation of Corporate Disclosure, Third Edition is a complete and up-to-date handbook on the issue of corporate disclosure, covering the impact of the federal securities laws on both informal communications and the process of communicating with shareholders. The Third Edition expands topics previously covered, addressing the legal issues and practical concerns surrounding implementation of the Private Securities Litigation Reform Act of 1995, the Sarbanes-Oxley Act of 2002, and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The book also has an in-depth treatment of managementand’s discussion and analysis (MDand&A), something that, although appearing in required SEC filings, involves many of the same difficult and complex issues raised by the informal disclosure process. Also addressed are: SEC reforms of the periodic reporting process; issues pertaining to stock research analysts and conflicts of interest; and various relevant corporate governance requirements and their disclosure implications. Critical areas analyzed include ;Disclosure requirements and anti-fraud provisions The duty to disclose Dissemination Issues involving materiality Disclosure of bad news Negotiations Dealing with analysts And much more!
Book Synopsis Regulation Fair Disclosure by : Peter F. Goodman
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:
Book Synopsis The Impact of Regulation Fair Disclosure on Investors' Prior Information Quality - Evidence from an Analysis of Changes in Trading Volume and Stock Price Reactions to Earnings Announcements by : Anwer S. Ahmed
Download or read book The Impact of Regulation Fair Disclosure on Investors' Prior Information Quality - Evidence from an Analysis of Changes in Trading Volume and Stock Price Reactions to Earnings Announcements written by Anwer S. Ahmed and published by . This book was released on 2007 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: We document that Regulation Fair Disclosure has reduced differences in information quality between investors prior to quarterly earnings announcements consistent with the intent of the regulation. This reduction is driven by small firms and high technology firms, rather than the large firms targeted by the SEC, which suggests that selective disclosure among large firms may have been much more limited than what was presumed by proponents of FD. In addition, we document that FD has decreased the average information quality of investors in small and high technology firms in the period prior to an earnings announcement while having no lasting effect on other firms. Taken together these two results suggest that, for small and high technology firms, FD succeeded in eliminating selective disclosure but also lowered the average quality of information available about these firms.
Book Synopsis Impact of Regulation Fair Disclosure on Corporate Communications with Investors by : Shalini Jhalani
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 Regulation FD written by Jill E. Fisch and published by . This book was released on 2015 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt: This chapter traces the development of the SEC's use of Regulation Fair Disclosure (FD) to address information asymmetry in the securities markets. The chapter describes the SEC's developing enforcement policy and notes, in particular, the SEC's efforts, through its selection and settlement of Regulation FD cases, to provide guidance to corporations and corporate officials about areas of key concern. The chapter concludes by highlighting current areas of particular importance, including disclosure of information through private meetings and the implications of technological innovations such as the internet and social media. The chapter is forthcoming in Research Handbook on Insider Trading (Stephen Bainbridge, editor).
Book Synopsis Regulation Fair Disclosure and the Credibility of Underwriter Analyst Recommendations by : Marcia Millon Cornett
Download or read book Regulation Fair Disclosure and the Credibility of Underwriter Analyst Recommendations written by Marcia Millon Cornett and published by . This book was released on 2010 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: Regulation Fair Disclosure (RegFD) prohibits selective disclosure of material non-public information by public companies to privileged individuals (such as favored research analysts or, in general, securities markets professionals) and requires broad, non-exclusionary disclosure of such information. We examine firms' stock price reactions to investment recommendation changes from two distinct groups of analysts around the passage of RegFD. We find that RegFD has had a significant impact regardless of whether recommendation changes were announced by affiliated analysts (those who are affiliated with investment banks that underwrite securities for companies) or unaffiliated analysts. Further, the results suggest that investors reacted more significantly to recommendation changes by affiliated analysts than to those by unaffiliated analysts prior to the implementation of RegFD. However, these significant differences are not present after the passage of RegFD.
Book Synopsis Impact of Disclosure Regulation on Information Asymmetry Case of Regulation Fair Disclosure by : Shyam V. Sunder
Download or read book Impact of Disclosure Regulation on Information Asymmetry Case of Regulation Fair Disclosure written by Shyam V. Sunder and published by . This book was released on 2002 with total page 124 pages. Available in PDF, EPUB and Kindle. Book excerpt:
