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The purpose of this paper is to examine the changes in the price impact of trades in the major Korean stock market following the introduction of disclosure to all traders of the top five brokers on the buy-side and the top five brokers on the sell-side of trades in real time for each stock in the KOSDAQ market.

The paper uses several alternative metrics for the price impact of trades. The study applies estimation methodology that accounts for the potential endogeneity of other market quality proxies, which are used as control variables in price impact regressions, by utilizing two-stage-least-square methods with fixed effect specification.

This study finds that the permanent price impact (information effect) of both buyer- and seller-initiated trades increases, which indicates that information is disseminated quicker in a transparent market. Uninformed trades have a larger permanent price impact than informed trades on both the buy and sell sides. The liquidity price effects are found to be mixed for buys and sells.

The study supports the current policy of the Korean Exchange to publicly display the five most active broker IDs on both the buy and sell sides, as it attracts both informed and liquidity traders, leading to faster price discovery in a more transparent market. However, a future study which analyzes the change in the market quality in both local markets would provide a complete picture of the effects of the policy.

Earlier studies documenting the effect of broker ID disclosure on market quality used effective spreads, market depth or order book imbalance as market quality measures. This study contributes to the existing literature by examining the changes in direct measures of the private information effect and liquidity effect of trades in a stock market – the Korean Stock Exchange – when the other part of the exchange (the KOSDAQ stock market) shifts to public broker ID transparency at the same transparency level.

Supervision remains a significant issue in our regulatory framework. The cases surrounding this concept are ongoing and the law evolving. This article explores the newer “red flag” supervision cases; discussing the implications and the duties that perhaps attach as a result of this developing case law. It also explores some concrete examples of what supervisors should do when confronted with relevant information.

The use of electronic media in the financial services industry is discussed in light of the regulatory framework in which the industry exists. The authors explore this issue in regards to both the securities and futures regulatory structure.

To describe and analyze in detail an Interpretive Release (the “2006 Interpretation”) approved on July 12, 2006 by the US Securities and Exchange Commission (“SEC”) regarding the soft dollar safe harbor under Section 28(e) of the Securities Exchange Act of 1934.

Following a brief discussion of the history of soft dollars, describes and analyzes in greater detail relevant aspects of the 2006 Interpretation, including an explanation of the three‐part test concerning the use of soft dollars to pay for products and services under the safe harbor, a discussion of “mixed use” items, further detail on soft dollar arrangements, an explanation of liabilities and obligations of managers and broker dealers, and an implementation timeline.

Under the 2006 Interpretation, a money manager may rely on the safe harbor to acquire products or services only upon satisfaction of each part of a three‐part test. First, does the product or service meet the eligibility criteria of Section 28(e)(3)? Second, does the eligible product or service provide lawful and appropriate assistance in the performance of relevant responsibilities? Finally, may the money manager properly conclude, in good faith, that the commissions paid are reasonable in relation to the value of the research and brokerage products and services provided by the broker (in relation either to the particular transaction or to the money manager's overall responsibilities with respect to discretionary accounts)? The 2006 Interpretation also is relevant to broker‐dealers who may receive soft dollars. Under Section 28(e), a money manager can pay soft dollars only to broker‐dealers who “provide” research or brokerage services and “effect” transactions. Under the 2006 Interpretation, the circumstances under which broker‐dealers will be seen as “providing” services and “effecting” transactions will be interpreted more broadly than under past interpretations, allowing brokers and money managers greater flexibility to structure soft dollar and commission‐sharing arrangements in a manner that will better serve the interests of investors.

Provides a detailed analysis of the 2006 Interpretation concerning soft dollars.

This paper sets out to explain the new Securities and Exchange Commission Rule 15c3‐5, which will require broker‐dealers to adopt and implement risk controls to govern their provision of “direct market access” (DMA).

The paper explains how the development and use of automated electronic trading processes and systems motivated broker‐dealers to offer DMA, “sponsored access,” and “naked access.” It explains the systems of risk management controls and supervisory procedures a broker‐dealer is required to maintain to manage the financial, regulatory, and other risks of sponsored access, including financial and regulatory controls and procedures.

The SEC proposed the Rule to more effectively manage the financial, regulatory, and other risks, such as legal and operational risks, associated with market access.

The paper offers practical guidance from expert broker‐dealer lawyers.

The purpose of this paper is to investigate the immediate impact of firm-specific announcements on the trading volume of individual and institutional investors on the Australian Securities Exchange (ASX), during a period when the market becomes fragmented.

This study uses intraday trading volume data in five-minute intervals prior to and after firm-specific announcements to measure individual and institutional abnormal volume. There are 70 such intervals per trading day and 254 trading days in the sample period. The first 10 minutes of trading (from 10.00 to 10.10 a.m.) is excluded to avoid the effect of opening auction and to ensure consistency in the “starting time” for all stocks. The volume transacted during five-minute intervals is aggregated and attributed to individual or institutional investors using Broker IDs.

Institutional investors exhibit abnormal trading volume before and after announcements. However, individual investors indicate abnormal trading volume only after announcements. Consistent with outcomes expected from a dividend washing strategy, abnormal trading volume around dividend announcements is statistically insignificant. Both individual and institutional investors’ buy volumes are higher than sell volumes before and after scheduled and unscheduled announcements.

The study is Australian focused, but the results are applicable to other limit order book markets of similar design.

The results add to the understanding of individual and institutional investors’ trading behaviour around firm-specific announcements in a securities market with continuous disclosure.

The results add to the understanding of individual and institutional investors’ trading behaviour around firm-specific announcements in a securities market with continuous disclosure.

These results will help regulators to design markets that are less predatory on individual investors.

The purpose of this paper is to provide selected Financial Industry Regulatory Authority (FINRA) Regulatory Notices and Disciplinary Actions issued in June, July, and August 2012.

The paper provides FINRA Regulatory Notice 12‐40, SEC Approves New FINRA Rule 5123 Regarding Private Placements of Securities; Regulatory Notice 12‐44, SEC Approves Amendments to FINRA Rule 4210 (Margin Requirements); Regulatory Notice 12‐55, Guidance on FINRA's Suitability Rule; and Regulatory Notice 13‐13, Trading and Quotation Halts in OTC Equity Securities; Trade Reporting Notice of April 17, 2013: Reduction of Reporting Times for Agency Pass‐Through Mortgage‐Backed Securities Traded TBA.

Notice 12‐40: FINRA Rule 5123 is part of a multi‐pronged approach to enhance oversight and investor protection in private placements; the rule will provide FINRA with more timely and complete information about the private placement activities of firms on behalf of other issuers. Notice 12‐44: The SEC approved amendments to FINRA Rule 4210 (Margin Requirements) related to option spread strategies, maintenance margin requirements for non‐margin eligible equity securities, free‐riding, “exempt accounts” and stress testing in portfolio margin accounts. Notice 12‐55: This Notice addresses two issues discussed in Regulatory Notice 12‐25: the scope of the terms “customer” and “investment strategy.” Notice 12‐25 provided guidance in a “frequently asked questions” format in FINRA Rule 2111 (Suitability). Notice 13‐13: The SEC approved amendments to FINRA Rule 6440, which provides authority for FINRA to initiate trading and quotation halts in OTC equity securities in circumstances where it is necessary to protect investors and the public; the rule provides authority to impose foreign regulatory halts, derivative halts and extraordinary event halts. Trade Reporting Notice of April 17, 2013: FINRA reminds firms of the coming reduction in reporting periods for the timely reporting of transactions in agency pass‐through mortgage‐backed securities traded TBA (to be announced) for good delivery and products not traded for good delivery.

These FINRA notices are selected to provide a useful indication of regulatory trends.

To summarize for registered broker-dealers and their customers upcoming margin requirements for “to-be-announced” (TBA) transactions on mortgage-backed securities pursuant to recently-amended FINRA Rule 4210.

This article explains the various margin requirements that are expected to come into effect on June 25, 2018. A chart summarizing the applicability of margin requirements for various types of accounts is also provided. Additionally, the article addresses practical steps to bring Master Securities Forward Transaction Agreements (“MSFTAs”) governing relevant transactions into compliance with the amended rules.

The compliance date for margining under FINRA Rule 4210 is approaching. Broker-dealers will be required to collect (but not post) daily variation margin and, depending on the type of account, maintenance margin, from their customers on specified transactions. Broker-dealers should become familiar with the relevant requirements in order to amend (or enter into new) MSFTAs by the deadline. Customers also should become familiar with, and consider the implications of, these margin requirements.

Concisely summarizes and explains the key requirements and provides practical guidance regarding compliance from experienced derivatives attorneys.

The purpose of this paper is to examine the impact of the introduction of anonymous trading on the liquidity of New Zealand Stock Exchange (NZX)‐listed stocks.

The paper examines the impact of the switch to anonymous trading on effective spreads and adverse selection costs using both univariate and multivariate approaches and data spanning a 240‐day event window period. The paper also compares the NZX's share of trading in cross‐listed stocks before and after the switch to anonymous trading to determine if the change in market architecture improved the NZX's competitiveness vis‐à‐vis the Australian Stock Exchange (ASX).

The paper finds that effective spreads and adverse selection costs increased following the switch to anonymous trading across the broad range of NZX50 stocks, consistent with an increase in information risk in the post‐event period. However, the paper also finds that the switch to anonymous trading improved the NZX's market share in trading in cross‐listed stocks vis‐à‐vis the ASX.

The results show that market liquidity deteriorates in a more opaque environment due to the greater information risk facing investors. This is in sharp contrast to prior research, which reports that similar changes in pre‐trade transparency on other exchanges have improved market liquidity. The results suggest that although institutional investors and the NZX itself might well have benefited from the switch to anonymous trading, liquidity demanders face higher transaction costs as a result.

Recent research has suggested that those exposed to passive smoking may incur an increased risk of contracting lung cancer. In the light of such findings, many employers have faced increasing demands from the workforce to introduce smoking policies. The possible legal implications are examined for those employers who fail to introduce such policies and some guidance is offered on the extent to which employment law protects the interests of those workers whose smoking habit makes it difficult or impossible to comply with smoking restrictions.