Capital-Market Effects of Securities Regulation: Prior Conditions, Implementation, and Enforcement Revisited
21 Pages Posted: 29 Jan 2019
Date Written: October 20, 2018
While it is not clear from Christensen, Hail, and Leuz (2016), the market abuse rules they examine are the same as in Cumming, Johan, and Li (2011), with a difference in focus on the date: Christensen et al. (2016) pick the date the regulations were signed into law, while Cumming et al. (2011) pick date the date the regulations were implemented with organizational agreements and computerized surveillance. Both papers study and find the exact same effect: regulatory change improves market liquidity. We explain the relative merits of the different approaches in this paper, and identify misleading statements in prior work.
Keywords: Securities Regulation, Market Manipulation, Liquidity, Insider Trading, Broker-Agency Conflict, Law and Finance
JEL Classification: G12, G14, G18, K22
Suggested Citation: Suggested Citation