Mandatory Disclosure of Blockholders and Related Party Transactions

Stringent Versus Flexible Rules

Research output: Working paperDiscussion paperOther research output

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Abstract

Investor 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.
Original languageEnglish
Place of PublicationTilburg
PublisherFinance
Volume2011-108
Publication statusPublished - 2011

Publication series

NameCentER Discussion Paper
Volume2011-108

Fingerprint

Blockholders
Disclosure
Related party transactions
Financial markets
Mandatory disclosure
Investors
Financial crisis
Ownership and control
Technological change
Regulatory reform
Legal framework
Financial instruments
Owners
Confidence
Transparency
Listed companies

Keywords

  • beneficial ownership
  • control enhancing mechanisms
  • corporate.

Cite this

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title = "Mandatory Disclosure of Blockholders and Related Party Transactions: Stringent Versus Flexible Rules",
abstract = "Investor 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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author = "J.A. McCahery and E.P.M. Vermeulen",
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Mandatory Disclosure of Blockholders and Related Party Transactions : Stringent Versus Flexible Rules. / McCahery, J.A.; Vermeulen, E.P.M.

Tilburg : Finance, 2011. (CentER Discussion Paper; Vol. 2011-108).

Research output: Working paperDiscussion paperOther research output

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