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Insiders and the law: the impact of Regulatory Change on Insider Trading

Gilbert, A; Tourani-Rad, A; Wisniewski, T
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Insiders_law.pdf (470.7Kb)
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http://hdl.handle.net/10292/1143
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Abstract
The impact of regulations in minimizing the detrimental effects of insider trading is unsettled. In this paper, we investigate the impact of the introduction of the Securities Market Amendment Act 2002 in New Zealand on several aspects of the market. After examining a sample of companies listed before and after the new laws introduction, we find strong evidence of a reduction in the cost of capital, bid-ask spreads and volatility accompanied by increases in liquidity, all as predicted. We conclude that the change in regulations has had a positive impact on the market.
Keywords
Insider Trading; Market Microstructure; Regulation; Cost of Capital
Date
2004
Item Type
Working Paper
Publisher
AUT Faculty of Business
Publisher's Version
http://www.aut.ac.nz/__data/assets/pdf_file/0006/48471/enterprise_and_innovation_14-2004.pdf
Rights Statement
2004 © - Copyright of the Author(s)

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