The Effectiveness of Regulation Fd

Posted: 5 Jan 2005

See all articles by Andreas Gintschel

Andreas Gintschel

JPMorgan

Stanimir Markov

University of Texas at Dallas - Naveen Jindal School of Management

Abstract

We examine whether Regulation FD has reduced the informativeness of analysts' information outputs. For a sample of financial analysts' earnings forecasts and recommendations released in a two-year window around Regulation FD's effective date, we show that in the post-Regulation FD period the absolute price impact of information disseminated by financial analysts is lower by 28%. Furthermore, the drop in price impact varies systematically with brokerage house and stock characteristics related to the level of selective disclosure prior to Regulation FD. Based on the time-series and cross-sectional evidence we conclude that Regulation FD has been effective in curtailing selective disclosure.

Keywords: Capital markets, financial analysts, government policy and regulation

JEL Classification: G14, G28, G29, M41, M45

Suggested Citation

Gintschel, Andreas and Markov, Stanimir, The Effectiveness of Regulation Fd. Available at SSRN: https://ssrn.com/abstract=640961

Andreas Gintschel (Contact Author)

JPMorgan ( email )

Junghofstrasse 14
Frankfurt, 60311
Germany
+49 69 7124 2195 (Phone)

Stanimir Markov

University of Texas at Dallas - Naveen Jindal School of Management ( email )

P.O. Box 830688
Richardson, TX 75083-0688
United States
972 883 5166 (Phone)

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