The impact of disclosure reform on the NZX's financial information environment

This study investigates the impact of changes to the New Zealand Exchange's listing rules and legislative amendments to the Securities Markets Act 1988 enacted in December 2002. The reforms provided statutory backing for a more stringent disclosure regime. We find evidence that non-dual listed firms, not subject to any prior enhanced disclosure regime, released more earnings-related information to the market in the post-reform period and announced their half-year and fiscal year-end results in a more timely manner. Our results also show that analysts' earnings forecast errors did not decline but analysts' forecasts showed less dispersion in the post-reform period. In respect of informational efficiency, we find evidence of a smaller abnormal return around the half-year and fiscal year earnings announcement date in the post-reform period. Our results suggest that the reforms improved the flow of information to investors, consistent with their intent.