The Impact of Regulation Fair Disclosure: Trading Costs and Information Asymmetry
In October 2000, the Securities and Exchange Commission (SEC) passed Regulation Fair Disclosure (FD) in an effort to reduce selective disclosure of material information by firms to analysts and other investment professionals. We find that the information asymmetry reflected in trading costs at earni...
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| Veröffentlicht in: | Journal of financial and quantitative analysis 2004-06, Vol.39 (2), p.209-225 |
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| container_title | Journal of financial and quantitative analysis |
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| creator | Eleswarapu, Venkat R. Thompson, Rex Venkataraman, Kumar |
| description | In October 2000, the Securities and Exchange Commission (SEC) passed Regulation Fair Disclosure (FD) in an effort to reduce selective disclosure of material information by firms to analysts and other investment professionals. We find that the information asymmetry reflected in trading costs at earnings announcements has declined after Regulation FD, with the decrease more pronounced for smaller and less liquid stocks. Return volatility around mandatory announcements is also lower but overall information flow is unchanged when mandatory and voluntary announcements are combined. Thus, the SEC appears to have diminished the advantage of informed investors, without increasing volatility. |
| doi_str_mv | 10.1017/S0022109000003045 |
| format | Article |
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Financ. Quant. Anal</addtitle><description>In October 2000, the Securities and Exchange Commission (SEC) passed Regulation Fair Disclosure (FD) in an effort to reduce selective disclosure of material information by firms to analysts and other investment professionals. We find that the information asymmetry reflected in trading costs at earnings announcements has declined after Regulation FD, with the decrease more pronounced for smaller and less liquid stocks. Return volatility around mandatory announcements is also lower but overall information flow is unchanged when mandatory and voluntary announcements are combined. 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| source | Jstor Complete Legacy; Cambridge University Press Journals Complete; EBSCOhost Business Source Complete |
| subjects | Announcements Asymmetric information Cost efficiency Cost estimates Costs Decimals Disclosure Earnings Earnings announcements Finance Financial regulation Information Information asymmetry Information flow Information sharing Investment P values Quantitative analysis Regulation SEC regulations Stockbrokers Stocks Teleconferencing Trade Transaction costs U.S.A |
| title | The Impact of Regulation Fair Disclosure: Trading Costs and Information Asymmetry |
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