Ongoing SEC Disclosures by Foreign Firms
68 Pages Posted: 6 Jul 2015 Last revised: 4 Jul 2019
Date Written: July 1, 2019
We study how home-market reporting requirements and listing choices associate with ongoing SEC disclosures by foreign firms and the investor response. The SEC defers material event and interim financial disclosure obligations to foreign firms’ home market regulator or exchange. We find a growing number of foreign firms incorporate in disclosure havens and have little or no ongoing disclosure obligations. These firms supply fewer disclosures but experience greater investor interest and market response around each filing. There is little evidence that the SEC substitutes for lower information flow with higher monitoring. Our results indicate that the SEC’s one-size-fits-all approach to foreign firm disclosure has led to increasing disparity in information flow, despite the strong demand for and reaction to disclosures by firms from weaker regimes.
Keywords: Information Environment, Disclosure, Foreign Firms, Cross-Listing, SEC Form 6-K
JEL Classification: G15, G34, G38
Suggested Citation: Suggested Citation