Are foreign issuers complying with Regulation Fair Disclosure?

Mathew, PG; Michayluk, D; Kofman, P

Are foreign issuers complying with Regulation Fair Disclosure?

Mathew, PG Michayluk, D

Kofman, P

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Publication Type:: Journal Article
Citation:: Journal of International Financial Markets, Institutions and Money, 2007, 17 (3), pp. 246 - 260
Issue Date:: 2007-07-01

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Field	Value	Language
dc.contributor.author	Mathew, PG	en_US
dc.contributor.author	Michayluk, D https://orcid.org/0000-0001-9020-0855	en_US
dc.contributor.author	Kofman, P	en_US
dc.date.issued	2007-07-01	en_US
dc.identifier.citation	Journal of International Financial Markets, Institutions and Money, 2007, 17 (3), pp. 246 - 260	en_US
dc.identifier.issn	1042-4431	en_US
dc.identifier.uri	http://hdl.handle.net/10453/5191
dc.description.abstract	Regulation Fair Disclosure (RFD) requires that any release of material information be made to the general public rather than to select individuals. The regulation represents an attempt by the Securities and Exchange Commission to restore a level of fairness to the market. Foreign issuers, however, are currently exempt from this rule. We examine liquidity changes around earnings announcements of American Depository Receipts (ADRs) before and after the introduction of RFD. We find that market makers have adjusted spreads to reflect the new, less information asymmetric environment for U.S. issues, but the same changes are not observed for our ADR sample. Similarly, the decline in activity measures of U.S. issues is not observed in our ADR sample. Our results suggest that investors and market makers are not yet convinced that foreign issuers are complying with RFD. © 2005 Elsevier B.V. All rights reserved.	en_US
dc.relation.ispartof	Journal of International Financial Markets, Institutions and Money	en_US
dc.relation.isbasedon	10.1016/j.intfin.2005.11.004	en_US
dc.subject.classification	Finance	en_US
dc.title	Are foreign issuers complying with Regulation Fair Disclosure?	en_US
dc.type	Journal Article
utslib.citation.volume	3	en_US
utslib.citation.volume	17	en_US
utslib.for	150201 Finance	en_US
utslib.for	1502 Banking, Finance and Investment	en_US
utslib.for	1402 Applied Economics	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Finance Discipline
utslib.copyright.status	closed_access
pubs.issue	3	en_US
pubs.publication-status	Published	en_US
pubs.volume	17	en_US

Abstract:

Regulation Fair Disclosure (RFD) requires that any release of material information be made to the general public rather than to select individuals. The regulation represents an attempt by the Securities and Exchange Commission to restore a level of fairness to the market. Foreign issuers, however, are currently exempt from this rule. We examine liquidity changes around earnings announcements of American Depository Receipts (ADRs) before and after the introduction of RFD. We find that market makers have adjusted spreads to reflect the new, less information asymmetric environment for U.S. issues, but the same changes are not observed for our ADR sample. Similarly, the decline in activity measures of U.S. issues is not observed in our ADR sample. Our results suggest that investors and market makers are not yet convinced that foreign issuers are complying with RFD. © 2005 Elsevier B.V. All rights reserved.

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http://hdl.handle.net/10453/5191