Since the adoption of the SEC's Rule 10b-21 in 1988, many researchers have been concerned over the effectiveness of short sales constraints in preventing manipulative trading in the derivatives market. We analyze whether options can be used as synthetic short sale instruments to manipulate stock...

We use confidential and novel data to measure the benefit to broker-dealers of being affiliated with a bank holding company and the resulting access to internal sources of funding. We accomplish this by comparing the balance sheets of broker-dealers that are associated with bank holding...

Central clearing counterparties (CCPs) were created to reduce default losses for market participants in derivatives markets. We show that not all market participants benefit, and some are worse off. Loss sharing rules and their interaction with market network structure affect who are winners and...

In light of previous literature that has investigated the effects of MiFID and MiFID II regulation on stock market liquidity, we investigate whether the introduction of MiFID II in Romania has had any effect on the stock market liquidity. Through our empirical analysis, we were able to estimate...

Designed to curb extraordinary volatility, (stock-level) circuit breakers lead to unnecessary trading halts, which have been prevalent during the recent COVID-19 crisis. More importantly, while created to accommodate the dissemination of fundamental information to market participants, most...

Studies have shown a gap between investors’ intentions and preferences on the one hand, and their actual behaviour on the other hand. This gap has been attributed to a perception of high volatility and less profitability in ESG investments, combined with a lack of knowledge and availability of...

In June 2019, the Securities and Exchange Commission (“SEC”) adopted Regulation Best Interest (“Reg BI” or “Final Rule”) with a compliance date of June 30, 2020, aiming at improving protection for retail customers and enhancing the standard of conduct under the Securities Exchange...

This chapter explores the application of fiduciary duties to regulated financial firms and financial services. At first blush, the need for such a chapter might strike some as surprising in that fiduciary duties and systems of financial regulation can be conceptualized as governing distinctive...

This paper introduces a two-step strategy, the synthetic control method combined with the difference-in-differences method, to evaluate the effectiveness of the Dodd-Frank Act (DFA). We find no evidence from our counterfactual analysis in support of the DFA reducing systemic risk in the US...

Executive pay has become a regulatory flashpoint of the global financial crisis. In contrast to the traditional non-interventionist approach to executive compensation, it has galvanized regulators around the world to search for effective responses to the perceived problem of executive pay. These...

This study examines the effect of SEC regulations on firm valuations and corporate policies over the past 50 years. I build a time-varying and industry-specific measure of SEC regulatory restrictions, based on the universe of effective SEC rules and machine-learning relevance of the regulations...

We examine the usage of debt by small firms trading on the over-the-counter (OTC) market and filing annual reports with the SEC. Similar to firms included in the Survey of Small Business Finance, the small OTC firms in our sample are more dependent on debt financing than firms listed on the NYSE...

We study the role of analyst incentives in the overall information environment in the stock market, focusing on the fundamental changes brought by MiFID II on the sell-side research industry in Europe. Implemented in 2018, MiFID II substantially changed analyst incentives, forcing them to work...

Eine zentrale Gegenpartei oder Kontrahent (Central Counterparty, CCP) ist im Finanzwesen eine juristische Person, die bei Transaktionen zwischen Verkäufer und Käufer tritt und somit als Vertragspartner für beide Positionen dient. Im Rahmen der G20 wurde nach der Finanzmarktkrise von 2007/08...

The post-crisis era presents major new challenges for the EU legislator in terms of effectively safeguarding the public and private interests in the realm of consumer finance in an increasingly digital environment. New and innovative ways of addressing tensions and contradictions between the...

To improve financial regulation, scholars have engaged in extensive research over the past decade to try to understand why systemically important financial institutions engage in excessive risk-taking. None of that research fully explains, however, the unusually excessive risk-taking by...

Under SEC Regulation Crowdfunding effective in May 2016, early-stage private companies are permitted to conduct securities crowdfunding offerings—low-dollar securities offerings on Internet platforms—to a large number of non-accredited investors. Using SEC filings and hand-collected data,...

On June 30, 2020 registered securities broker-dealers must begin their compliance with new SEC Regulation Best Interest and Form CRS Relationship Summary/Form ADV Part 3, which were announced by the Securities and Exchange Commission on June 5, 2019. These new regulations were promulgated under...

This paper examines effects of MiFID II on European stock markets. We study the effects of the new tick size regime, both intraday and in the closing auction. An increase (decrease) in tick size is associated with a decrease (increase) in intraday liquidity, but a more (less) stable market. In...

This paper examines the effect of the Dodd-Frank Act (“Dodd-Frank”) on the profits and risk-taking of the hedge fund industry. Dodd-Frank subjects most hedge funds to government inspections, requires them to register with the Securities and Exchange Commission (“SEC”), and imposes a...

Das Thema Nachhaltigkeit ist längst auf den Finanzmärkten angekommen. Im Zuge dessen haben sich Nachhaltigkeitsratingagenturen etabliert, die in Form von Ratings und Indizes bewerten, wie nachhaltig Finanzinstrumente und Unternehmen sind. Ihre Tätigkeit wirft juristische Fragestellungen auf:...

This paper analyzes the language and meaning of the Securities and Exchange Commission's "Regulation Best Interest" and related regulatory actions establishing standards of conduct for securities broker-dealers and investment advisers with respect to retail investors

Several provisions of the TCJA of 2017 affect Code Sec. 1031. The final regulations under Code Sec. 199A and the proposed bonus deprecation regulations provide guidance regarding the interaction of those provisions and Code Sec. 1031. This article explores those interactions, explaining how the...

We investigate how the Dodd-Frank Act (DFA) affects voluntary disclosures of large bank holding companies (BHCs) relative to other banks and unregulated firms in the financial sector. Using a difference-in-differences research design, we find that following the introduction of the DFA, large...

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)...

We provide the first direct analysis of how dealers' funding liquidity affects their liquidity provision in securities markets. Dealers' repo trading terms, including both haircuts and repo spreads, and their ability to finance their bond inventories through repos affect their bid-ask spreads...

In securities law, investor protection means that an issuer of securities, here partnership interests for private equity, must register with the Securities and Exchange Commission (“SEC”) and be subject to disclosure, reporting, record-keeping compliance and examination programs.This article...

Theory offers equivocal guidance on how enhanced corporate disclosure and transparency impact underlying liquidity. We examine the market liquidity effects of enhanced information induced by the public registration of 144A bonds, a significant and growing segment of the U.S. bond market. Using...

This is a draft chapter for a forthcoming volume, The Oxford Handbook on Financial Regulation, edited by Eilís Ferran, Niamh Moloney, and Jennifer Payne, (Oxford University Press). It provides an overview of the role of mandatory disclosure in financial markets. Focusing mainly on issuer...

This paper considers how the landscape of New Zealand securities regulation has changed in the 30 years since John Farrar and Mark Russell's 1985 Company Law and Securities Regulation in New Zealand. The discussion focuses on the reasons for the development in New Zealand, and how to locate this...

This paper investigates the effects produced by the unbundling of analyst research costs required by MiFID II on market quality, as measured by stock liquidity and price efficiency. We find that the payment of an explicit price for research is associated with a reduction in analyst coverage in...