文档介绍：The Mandatory Disclosure of
Trades and Market Liquidity
Michael J. Fishman
Kathleen M. Hagerty
Northwestern University
Financial market regulations require various
"insiders" to disclose their trades after the
trades are made. We show that such mandatory
disclosure rules can increase insiders' expected
trading profits. This is because disclosure leads
to profitable trading opportunities for insiders
even if they possess no private information on
the asset’s value. We also show that insiders will
generally not voluntarily disclose their trades,
so for disclosure to be ing, it must be
mandatory. Key to the analysts is that the mar-
ket cannot observe whether an insider is trading
on private information regarding asset value or
is trading for personal profit reasons.
Financial market regulations require certain individu-
als to disclose their trades. These disclosures are made
after the trades have pleted. This paper an-
alyzes the effects of such mandatory disclosure rules
on the operation of a market. It is generally believed
-that more public information concerning the trades
of a potentially informed trader limits the ability of
the trader to profit on the basis of superior informa-
tion and provides a more “level playing field” among
market participants (for brevity, we refer to a poten-
tially informed trader as an “insider”). Contrary to this
view, we show that mandatory disclosure of an in-
We would like to thank Tom e, Chester Spatt (the editor), the referee,
and seminar participants at Columbia university, Duke University, Univer-
sity of Florida, Indiana University, London School of Economics, New York
University, University of Pennsylvania, University of Wisconsin and the
Commodity Futures mission for ments. Address
correspondence to Kathleen M. Hagerty, Northwestern University, Kellogg
Graduate School of Management, 2001 Sheridan Road, Evanston, IL 60208.
The Review of Financial Stud