Mandatory Disclosure of Blockholders and Related Party Transactions: Stringent Versus Flexible Rules
AbstractInvestor confidence in financial markets depends in large part on the existence of an accurate disclosure and reporting regime that provides transparency in the beneficial ownership and control structures of publicly listed companies. Today, a common post-financial crisis regulatory reform theme is to tighten the disclosure and reporting rules that apply to large blockholders. We examine the implications of this trend, analyzing whether detailed, stringent and mandatory reporting rules could have a counterproductive effect on the financial markets. A central idea of this paper is the evolution of a well-balanced regime that is flexible and proportional and allows for a case-by-case determination of a beneficial owner. In the current era of information-based technology, the most obvious challenge for regulators is to design a legal framework that is adaptable to technological change and its impact on financial instruments.
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Bibliographic InfoPaper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 2011-108.
Date of creation: 2011
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Web page: http://center.uvt.nl
beneficial ownership; control enhancing mechanisms; corporate.;
Find related papers by JEL classification:
- G30 - Financial Economics - - Corporate Finance and Governance - - - General
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
- K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-10-15 (All new papers)
- NEP-CFN-2011-10-15 (Corporate Finance)
- NEP-REG-2011-10-15 (Regulation)
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