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Securities Regulation (security + regulation)

Distribution by Scientific Domains
Business, Economics, Finance and Accounting90%

Selected Abstracts

Securities Regulation, the Timing of Annual Report Release, and Market Implications: Evidence from China

JOURNAL OF INTERNATIONAL FINANCIAL MANAGEMENT & ACCOUNTING, Issue 2 2006
In-Mu Haw
Using a sample of earnings announcements of Chinese firms in the fiscal years 1994,1999, covering the periods before and after the introduction of a regulation to stagger the release of annual reports, we reassess the relation between earnings news and the timing of earnings announcements. We find that even though the reporting lag has significantly shortened as a result of the regulation, the pattern whereby good news is announced earlier than bad news persists. We then examine the behavior of stock prices before earnings announcements and find some indication of information leakage. These findings suggest that the regulation had the expected effect of reducing reporting delay and earnings release clustering. Yet, it did not appear to reduce the extent of the pre-announcement leakage of information. [source]

New Governance, Compliance, and Principles-Based Securities Regulation

AMERICAN BUSINESS LAW JOURNAL, Issue 1 2008
Cristie L. Ford
First page of article [source]

Securities Regulation Reform and the Decline of Rights Offerings

CANADIAN JOURNAL OF ADMINISTRATIVE SCIENCES, Issue 2 2001
Nancy D. Ursel
This paper develops the hypothesis that the decline in the use of rights offerings is due to reductions in issue costs brought about by changes in securities regulation. The hypothesis is tested in two jurisdictions: Canada and the United States. Time series analysis is used to determine if the decreased use of rights offerings in the 1970,1985 period is associated with regulatory changes designed to ease stock issues, such as short form registration and shelf registration in the U.S. and the Prompt Offer Qualification (POP) system in Canada. The findings are consistent with a significant decrease in rights usage concurrent with the earliest reform in each country. Résumé La présente étude avance l'hypothèse que la réduction de l'emploi des droits de souscription est due à la diminution des coûts d'émission permise par les réformes des lois sur les valeurs mobilières. L'hypothèse est testée dans deux juridictions: le Canada et les États-Unis. Nous faisons une analyse de données chronologiques pour déterminer si la réduction du nombre de droits de souscription entre 1970,1985 reflète les réformes des règlements conçues pour diminuer les coûts d'émission, par exemple, aux États-Unis, l'enregistrement simplifié et l'enregistrement préalable et, au Canada, le Régime du prospectus simplifié. Les résultats sont compatibles avec une diminution significative de l'emploi des droits de souscription, dans chaque pays, dès les premières réformes. [source]

Market Consequences of Earnings Management in Response to Security Regulations in China,

CONTEMPORARY ACCOUNTING RESEARCH, Issue 1 2005
IN-MU HAW
Abstract Under the 1996-98 security regulations in China, the accounting rate of return on equity (ROE) has to be greater than 10 percent for three "consecutive" years for a firm to qualify for stock rights offers. Despite declining economic conditions during this period, the percentage of firms reporting ROE between 10 and 11 percent is about "three" times that for 1994-95. This unique regulatory environment provides a natural experimental setting for the empirical assessment of earnings-management behavior and its consequences. This study examines whether listed Chinese firms manage earnings to meet regulatory benchmarks and whether regulators and investors consider the quality of earnings in their respective regulatory and investment decisions. On the basis of a sample of listed Chinese firms from 1996 to 1998, we observe that managers execute transactions involving below-the-line items and use income-increasing accounting accruals to meet regulatory ROE targets for stock rights offerings. The firms that apply for, but fail to receive, regulatory approval manage earnings more significantly than do firms that receive approval and pair-matched control firms. Our market study also suggests that investors differentiate the quality of earnings and put less value on earnings suspected of a greater degree of management. Overall, our results imply that the regulatory bodies and investors to some extent make rational adjustments for the quality of earnings. [source]

Recent Changes in the Regulation of Financial Markets and Reporting in Canada,

ACCOUNTING PERSPECTIVES, Issue 1 2007
Carla Carnaghan
ABSTRACT The regulation of financial reporting and financial markets has undergone significant change in both the United States and Canada since 2000. In Canada, the regulatory regime is particularly complex and politically controversial, with much speculation about possible future directions. This paper's purpose is to explain the current regulatory environment as it stands in mid-2006 to assist those who teach or conduct research in this domain. On the basis of a review of existing regulations and related studies, this paper first provides an explanation of the major jurisdictional issues that affect financial reporting and regulation in Canada, including identifying the roles of the key players. Second, it identifies specific reporting changes that might be of particular relevance to prospective capital market researchers. Where relevant, comparisons are made with regulatory provisions in the United States, because the majority of capital markets research concerns U.S. securities exchanges regulation, and the Canadian regulations themselves often refer to U.S. regulations as a point of comparison. We find that the lack of a single national securities regulator in Canada and overlaps in federal and provincial jurisdiction and among regulatory bodies mean there is a large range of players involved in financial markets regulation. Ongoing efforts to improve integration include the new passport system, improved harmonization of securities regulation, and consideration of mergers between some of the involved organizations. Other changes have led to a greater emphasis in Canada on the regulation of continuous disclosure and corporate governance than was previously the case. Changes in specific reporting regulations and guidelines since 2002 have generally increased the amount of disclosure. [source]

International Differences in the Cost of Equity Capital: Do Legal Institutions and Securities Regulation Matter?

JOURNAL OF ACCOUNTING RESEARCH, Issue 3 2006
LUZI HAIL
ABSTRACT This paper examines international differences in firms' cost of equity capital across 40 countries. We analyze whether the effectiveness of a country's legal institutions and securities regulation is systematically related to cross-country differences in the cost of equity capital. We employ several models to estimate firms' implied or ex ante cost of capital. Our results support the conclusion that firms from countries with more extensive disclosure requirements, stronger securities regulation, and stricter enforcement mechanisms have a significantly lower cost of capital. We perform extensive sensitivity analyses to assess the potentially confounding influence of countries' long-run growth differences on our results. We also show that, consistent with theory, the cost of capital effects of strong legal institutions become substantially smaller and, in many cases, statistically insignificant as capital markets become globally more integrated. [source]

Securities Regulation Reform and the Decline of Rights Offerings

CANADIAN JOURNAL OF ADMINISTRATIVE SCIENCES, Issue 2 2001
Nancy D. Ursel
This paper develops the hypothesis that the decline in the use of rights offerings is due to reductions in issue costs brought about by changes in securities regulation. The hypothesis is tested in two jurisdictions: Canada and the United States. Time series analysis is used to determine if the decreased use of rights offerings in the 1970,1985 period is associated with regulatory changes designed to ease stock issues, such as short form registration and shelf registration in the U.S. and the Prompt Offer Qualification (POP) system in Canada. The findings are consistent with a significant decrease in rights usage concurrent with the earliest reform in each country. Résumé La présente étude avance l'hypothèse que la réduction de l'emploi des droits de souscription est due à la diminution des coûts d'émission permise par les réformes des lois sur les valeurs mobilières. L'hypothèse est testée dans deux juridictions: le Canada et les États-Unis. Nous faisons une analyse de données chronologiques pour déterminer si la réduction du nombre de droits de souscription entre 1970,1985 reflète les réformes des règlements conçues pour diminuer les coûts d'émission, par exemple, aux États-Unis, l'enregistrement simplifié et l'enregistrement préalable et, au Canada, le Régime du prospectus simplifié. Les résultats sont compatibles avec une diminution significative de l'emploi des droits de souscription, dans chaque pays, dès les premières réformes. [source]

The employment effects of labour legislation in India: a critical essay

INDUSTRIAL RELATIONS JOURNAL, Issue 2 2010
Errol D'Souza
ABSTRACT Job security regulations have been central to government interventions in the labour market in India. These have been criticised for restricting employment growth. We argue that job security regulation has not had the negative effects its critics make a case out for. Firms have changed work practices and reorganised job boundaries as the import substituting industrialisation regime was dismantled. Weak enforcement of laws has supported this restructuring effort, with firms resorting to voluntary retirement of workers and increasingly hiring on the basis of flexible contracts. A two-tier system of employment currently prevails, with job security for the employed insiders and no protection to newly hired outsiders. Unorganised workers' employment prospects have been furthered in this emerging scenario, and their alliance with firms and the state results in an atrophying of job security regulations. [source]

Market Consequences of Earnings Management in Response to Security Regulations in China,

CONTEMPORARY ACCOUNTING RESEARCH, Issue 1 2005
IN-MU HAW
Abstract Under the 1996-98 security regulations in China, the accounting rate of return on equity (ROE) has to be greater than 10 percent for three "consecutive" years for a firm to qualify for stock rights offers. Despite declining economic conditions during this period, the percentage of firms reporting ROE between 10 and 11 percent is about "three" times that for 1994-95. This unique regulatory environment provides a natural experimental setting for the empirical assessment of earnings-management behavior and its consequences. This study examines whether listed Chinese firms manage earnings to meet regulatory benchmarks and whether regulators and investors consider the quality of earnings in their respective regulatory and investment decisions. On the basis of a sample of listed Chinese firms from 1996 to 1998, we observe that managers execute transactions involving below-the-line items and use income-increasing accounting accruals to meet regulatory ROE targets for stock rights offerings. The firms that apply for, but fail to receive, regulatory approval manage earnings more significantly than do firms that receive approval and pair-matched control firms. Our market study also suggests that investors differentiate the quality of earnings and put less value on earnings suspected of a greater degree of management. Overall, our results imply that the regulatory bodies and investors to some extent make rational adjustments for the quality of earnings. [source]

The employment effects of labour legislation in India: a critical essay

INDUSTRIAL RELATIONS JOURNAL, Issue 2 2010
Errol D'Souza
ABSTRACT Job security regulations have been central to government interventions in the labour market in India. These have been criticised for restricting employment growth. We argue that job security regulation has not had the negative effects its critics make a case out for. Firms have changed work practices and reorganised job boundaries as the import substituting industrialisation regime was dismantled. Weak enforcement of laws has supported this restructuring effort, with firms resorting to voluntary retirement of workers and increasingly hiring on the basis of flexible contracts. A two-tier system of employment currently prevails, with job security for the employed insiders and no protection to newly hired outsiders. Unorganised workers' employment prospects have been furthered in this emerging scenario, and their alliance with firms and the state results in an atrophying of job security regulations. [source]