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Who Benefited from the Disclosure Mandates of the 1964 Securities Acts Amendments?

Journal of Corporate Finance, Forthcoming

52 Pages Posted: 13 Mar 2008 Last revised: 17 May 2011

Robert H. Battalio

University of Notre Dame - Department of Finance

Brian C. Hatch

University of Cincinnati - Department of Finance - Real Estate

Tim Loughran

University of Notre Dame

Date Written: May 16, 2011

Abstract

The 1964 Securities Acts Amendments extended disclosures mandated of NYSE firms to most firms trading in the Over-the-Counter (OTC) market. Although some prior evidence suggests substantial value increases for OTC firms due to the "value enhancing" mandated disclosures, we find no statistical difference in announcement returns for OTC firms moving to the NYSE before and after the legislation. One purported advantage to investors from the 1964 legislation was increased financial reporting. Yet, we document that the bulk of OTC firms analyzed in prior studies were already providing investors financial information before the legislation. Apparently, investors did not value the mandated disclosures. We do find evidence that the NYSE benefited from the legislation by increasing the number of OTC firms switching to their exchange around its passage.

Keywords: mandated disclosure, 1964 Securities Acts Amendments, Greenstone, Oyer, and Vissing-Jorgensen

JEL Classification: G38

Suggested Citation

Battalio, Robert H. and Hatch, Brian C. and Loughran, Tim, Who Benefited from the Disclosure Mandates of the 1964 Securities Acts Amendments? (May 16, 2011). Journal of Corporate Finance, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1104743

Robert H. Battalio (Contact Author)

University of Notre Dame - Department of Finance ( email )

P.O. Box 399
Notre Dame, IN 46556-0399
United States
574-631-9428 (Phone)
574-631-5255 (Fax)

Brian C. Hatch

University of Cincinnati - Department of Finance - Real Estate ( email )

Carl H. Lindner Hall
P.O. Box 210195
Cincinnati, OH 45221
United States
513-556-7076 (Phone)
513-556-0979 (Fax)

Tim Loughran

University of Notre Dame ( email )

Department of Finance
245 Mendoza College of Business
Notre Dame, IN 46556-5646
United States
574-631-8432 (Phone)
574-631-5255 (Fax)

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