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Corporate and institutional control over the dissemination of price sensitive information

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  • John Holland

Abstract

This article explores how companies and financial institutions used their private relationship channels and contacts to encourage compliance with the 1994 UK Stock Exchange guidance on the dissemination of price sensitive information to the stock market. Extensive case data is used to identify and illustrate this private self regulation process. The companies and institutions developed 'mirror image' themes in their approaches to self regulating the corporate release and institutional receipt of price sensitive information. Both parties conducted this self regulation within their regular contacts and links and as part of their strategic decision processes. These matching self regulatory themes provide a simple typology which reveals the spectrum of possible responses across the corporate and institutional cases. The self regulatory process is interpreted within finance theory and within institutional organizational theory. Finally, the paper examines how the self regulatory mechanism contrasts with and interacts with the more explicit and well known market and legal mechanisms.

Suggested Citation

  • John Holland, 1996. "Corporate and institutional control over the dissemination of price sensitive information," The European Journal of Finance, Taylor & Francis Journals, vol. 2(1), pages 77-102.
    • Handle: RePEc:taf:eurjfi:v:2:y:1996:i:1:p:77-102
    DOI: 10.1080/135184796337616
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    References listed on IDEAS

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    1. Seyhun, H Nejat, 1992. "The Effectiveness of the Insider-Trading Sanctions," Journal of Law and Economics, University of Chicago Press, vol. 35(1), pages 149-182, April.
    2. David A. Buchanan, 1993. "Recruitment Mode As A Factor Affecting Informant Response In Organizational Research," Journal of Management Studies, Wiley Blackwell, vol. 30(2), pages 297-313, March.
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    Cited by:

    1. John Holland, 1999. "Financial Reporting, Private Disclosure and the Corporate Governance Role of Financial Institutions," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 3(2), pages 161-187, June.
    2. Philip T. Sinnadurai, 2008. "Voluntary Disclosure of Good and Bad Earnings News in a Low Litigation Setting," Accounting Perspectives, John Wiley & Sons, vol. 7(4), pages 317-340, November.

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