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1 – 10 of over 1000
Article
Publication date: 27 July 2018

Lik Jing Ung, Rayenda Khresna Brahmana and Chin-Hong Puah

The purpose of this paper is to investigate whether real estate companies manipulate their earnings through the brokerage fee across ownership expropriation or not.

Abstract

Purpose

The purpose of this paper is to investigate whether real estate companies manipulate their earnings through the brokerage fee across ownership expropriation or not.

Design/methodology/approach

This study considers Kuala Lumpur Stock Exchange listed real estate firms to investigate how the brokerage fee in the real estate industry might affect the earnings management of firms across its ownership expropriation. Using annual report data, the authors investigate the associations over a panel for the period 2008−2012. Robust panel regression is used to divulge the probability values with reference by probit regression.

Findings

Overall, the results show that high brokerage fees would drive more events of earnings management and that, generally, the ownership concentration among Malaysian real estate firms significantly affects the earnings management of the firms.

Practical implications

This study shows that firm profitability and brokerage fees enhance the probability of firm’s earnings management. A low brokerage fee would reflect low revenue to the company. Therefore, management would opt to manipulate earnings in order to overstate earnings, which garners more interest from investors.

Originality/value

Real estate values in Malaysia have climbed steadily over the years due to a combination of reasons giving companies a higher brokerage fee. Earnings management has become a big issue for property investors. The study demonstrates the relationship between earnings management and brokerage fee across ownership expropriation which can be considered by shareholders in their own strategic planning and investors in their own investing.

Details

Property Management, vol. 36 no. 4
Type: Research Article
ISSN: 0263-7472

Keywords

Article
Publication date: 1 April 2002

Terrance J. O’Malley and Kenneth E. Neikirk

Part I of this series appeared in the Summer 2002 issue of The Journal of Investment Compliance. It addressed the regulation of wrap fee programs under the Investment Company Act…

Abstract

Part I of this series appeared in the Summer 2002 issue of The Journal of Investment Compliance. It addressed the regulation of wrap fee programs under the Investment Company Act of 1940 (“Investment Company Act”) and the requirements of Rule 3a‐4 thereunder, which must be met so that a wrap fee program is not deemed to be an investment company. Part I also discussed certain issues arising under the Investment Advisers Act of 1940 (“Advisers Act”), including how program sponsors and any third‐party portfolio managers generally are viewed as investment advisers and are subject to the Advisers Act. Part II discusses additional Advisers Act issues such as suitability, fees, and advertising. It also briefly reviews issues arising under the Securities Exchange Act of 1934 (“Exchange Act”) and the Employee Retirement Income Security Act of 1974 (“ERISA”). The information provided in Part II assumes that readers have some basic familiarity with Part I.

Details

Journal of Investment Compliance, vol. 3 no. 2
Type: Research Article
ISSN: 1528-5812

Keywords

Article
Publication date: 12 September 2008

Donald P. Carleen and Jeffrey Ross

The purpose of this paper is to analyze recent regulations and proposed regulations issued by the US Department of Labor (DOL) that relate to the reporting of compensation paid to…

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Abstract

Purpose

The purpose of this paper is to analyze recent regulations and proposed regulations issued by the US Department of Labor (DOL) that relate to the reporting of compensation paid to service providers to employee benefit plans.

Design/methodology/approach

The paper reviews the statutory provisions of the Employee Retirement Income Security Act of 1974, as amended (ERISA), applicable DOL regulations as available in the Federal Register and certain public comments and a DOL FAQs document regarding the applicable regulations available on the DOL's web site. The paper also relies on observations of common market practice based on actual experience.

Findings

Recent DOL regulations – in particular those related to Form 5500 reporting and the “Necessary Services Exemption” – may significantly affect the reporting obligations of certain private investment fund sponsors with respect to their employee benefit plan investors. It shows that, although the scope of these regulations is understandable in the context of participant‐directed defined contribution plans, they may be less so in the context of defined benefit plans, which invest more frequently in private investment funds. There are some potential exceptions, on which private investment fund sponsors may be able to rely. Achieving compliance with the rules as drafted, however, may be time‐consuming and costly.

Practical implications

Private investment fund sponsors may wish to begin looking at their compensation and service provider arrangements in light of these regulations and consider how best to respond.

Originality/value

The paper contains two experienced ERISA practitioners' analysis of recent regulations on which relatively few stakeholders have seemed to focus to date.

Details

Journal of Investment Compliance, vol. 9 no. 3
Type: Research Article
ISSN: 1528-5812

Keywords

Article
Publication date: 5 June 2017

Soo-Wah Low

The purpose of this paper is to examine the determinants of fund expense ratio for Malaysia-based international equity funds. An understanding of what these factors are and how…

Abstract

Purpose

The purpose of this paper is to examine the determinants of fund expense ratio for Malaysia-based international equity funds. An understanding of what these factors are and how they affect a fund’s expense ratio is important given that international funds can be expensive to operate and that fund expenses have negative impact on investors’ returns.

Design/methodology/approach

This study employs a standard cross-sectional regression model in examining the factors that influence fund expense ratio of international equity funds.

Findings

The findings show that sales charge is positively related to fund expense ratio although it is not included in the expense ratio computation. This suggests that investor could possibly incur additional “hidden cost” since sales charge represents an upfront cost that an investor has already paid at the time of the fund sale. Additionally, funds with aggressive investment objective and frequent portfolio turnover show higher expense ratios than funds with conservative investment objective and less trading activities. There is no evidence that fund size, fund age, and the number of funds in a fund family are significantly related to the fund expense ratio. While the lack of statistical finding for fund size in this study seems inconsistent with the results of the US market in general, the finding is supportive of the Thai equity fund market and thus implying that finding could be country specific.

Research limitations/implications

There is limited availability of international equity funds in Malaysia.

Practical implications

The findings provide useful insights for investors to make informed international fund selection decisions. Expense-conscious investors should pay particular attention to fund’s sales charge, turnover ratio, and its investment objective when selecting funds for investment.

Originality/value

This paper provides first evidence on the determinants of fund expense ratio of Malaysia-based international equity funds.

Details

American Journal of Business, vol. 32 no. 2
Type: Research Article
ISSN: 1935-5181

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Article
Publication date: 6 November 2018

Robert Van Grover

To summarize and interpret a Risk Alert issued on April 12, 2018 by the US SEC’s Office of Compliance Inspections and Examinations (OCIE) on the most frequent advisory fee and…

Abstract

Purpose

To summarize and interpret a Risk Alert issued on April 12, 2018 by the US SEC’s Office of Compliance Inspections and Examinations (OCIE) on the most frequent advisory fee and expense compliance issues identified in recent examinations of investment advisers.

Design/methodology/approach

Summarizes deficiencies identified by the OCIE staff pertaining to advisory fees and expenses in the following categories: fee billing based on incorrect account valuations, billing fees in advance or with improper frequency, applying incorrect fee rates, omitting rebates and applying discounts incorrectly, disclosure issues involving advisory fees, and adviser expense misallocations.

Findings

In the Risk Alert, OCIE staff emphasized the importance of disclosures regarding advisory fees and expenses to the ability of clients to make informed decisions, including whether or not to engage or retain an adviser.

Practical implications

In light of the issues identified in the Risk Alert, advisers should assess the accuracy of disclosures and adequacy of policies and procedures regarding advisory fee billing and expenses. As a matter of best practice, advisers should implement periodic forensic reviews of billing practices to identify and correct issues relating to fee billing and expenses.

Originality/value

Expert guidance from experienced investment management lawyer.

Article
Publication date: 3 February 2022

Emre Tarim

This paper aims to explore how sell-side analysts and salespeople make sense of uncertainty on their market knowledge, valuation and marketing outputs.

Abstract

Purpose

This paper aims to explore how sell-side analysts and salespeople make sense of uncertainty on their market knowledge, valuation and marketing outputs.

Design/methodology/approach

Data is collected by direct observations of and interviews with analysts and salespeople in the Turkish stock exchange, an emerging market with considerable global fund management activity.

Findings

Analysts face considerable uncertainty on their market value forecasts but dismiss it as local dynamics not incorporable to valuation practices in global sell-side business. Salespeople, despite paying more attention to such dynamics owing to their sales tasks, limit themselves to analyst output in marketing. Both actors recognise the importance of analyst work to be able to have “a right to speak” in global sell-side business.

Research limitations/implications

Changing market conditions and regulations since the time of study have been shaping analysts and salespeople work in global sell-side business, for example, the way sell-side is compensated by buy-side, buy-side’s move to receiving sell-side services from fewer brokers and hence shrinking sell-side teams. The paper does not address these. Nonetheless, it shows how valuation and marketing can be two distinct lines of work in sell-side business irrespective of market conditions and raises the question for future research as to how sell-side professionals manage this distinction, and how they make sense of and cope with broad market dynamics beyond sell-side and buy-side relations (e.g. automated trading machines, online retail trading).

Originality/value

The paper provides rare observation-based insights into analyst and salespeople work, including their sensemaking of uncertainty. It shows the importance of market identities and associated knowledge in valuation and marketing work in sell-side business.

Details

Qualitative Research in Financial Markets, vol. 14 no. 4
Type: Research Article
ISSN: 1755-4179

Keywords

Abstract

Details

The Savvy Investor’s Guide to Pooled Investments
Type: Book
ISBN: 978-1-78973-213-9

Article
Publication date: 7 February 2020

Enrico Battisti, Fabio Creta and Nicola Miglietta

This paper gathers initial evidence about the nature and features of the equity crowdfunding model in Italy, especially in terms of regulations. The purpose of this study is to…

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Abstract

Purpose

This paper gathers initial evidence about the nature and features of the equity crowdfunding model in Italy, especially in terms of regulations. The purpose of this study is to examine how equity crowdfunding might support the real estate sector in Italy.

Design/methodology/approach

To explore the recent initiatives in the development of FinTech in Italy, especially referring to equity crowdfunding’s instrument, a qualitative perspective is used. In particular, this paper relies on primary data from regulations and secondary data from the public domain, which are examined in relation to the current literature.

Findings

The results of this study show that equity crowdfunding represents a funding method that is rapidly increasing in Italy, despite rather rigid regulation. Among the various sectors involved, the real estate sector could benefit from the crowdfunding models and, specifically, from the equity one. The development of new real estate equity crowdfunding portals that allow diversification of investment (by reducing the typical entry barriers for real estate investment) could guarantee greater investment transparency and simplicity.

Practical implications

Real estate crowdfunding can be a simple way to invest in the real estate industry. Thanks to the use of technology, specifically internet-based platforms, this type of crowdfunding allows for small investors, as well as professional investors, to access an asset class otherwise not open to small investment tickets and improve the diversification of investments.

Originality/value

Although recent literature has examined the concept of crowdfunding and highlighted different models, aspects and campaigns, no prior studies, to the authors’ knowledge, have explicitly and jointly investigated, also based on the state of art of regulation, the equity crowdfunding model and the real estate sector in Italy.

Details

Journal of Financial Regulation and Compliance, vol. 28 no. 3
Type: Research Article
ISSN: 1358-1988

Keywords

Open Access
Article
Publication date: 19 November 2020

Clarence Goh

Prior studies have documented the phenomenon of rounding of analysts' earnings per share (EPS) forecasts in the USA. From the outset, it is unclear if analysts following Singapore…

Abstract

Purpose

Prior studies have documented the phenomenon of rounding of analysts' earnings per share (EPS) forecasts in the USA. From the outset, it is unclear if analysts following Singapore firms also similarly engage in the rounding of their EPS forecasts. This study aims to investigate the extent to which analysts engage in rounding of EPS forecasts of firms listed on the Singapore Exchange.

Design/methodology/approach

The author conducted his analysis on a sample of analyst EPS forecasts of companies listed on the Singapore Stock Exchange, downloaded from the International Brokers Estimate System (I/B/E/S). This sample consists of 24,219 annual EPS forecasts announced from June 2011 to September 2019. These forecasts were made for 285 unique firms by 48 unique analysts.

Findings

The author finds that there is substantial rounding of EPS forecasts, with 9.59% of EPS forecasts examined ending in five- or ten-cent intervals. In supplementary analysis, the author further finds that the level of rounding was comparable across two periods under examination, from 2011 to 2015 and from 2016 to 2019. The author also finds that there was substantial rounding even for forecasts of relatively large magnitudes (i.e. US$1.00 and above).

Originality/value

This study is the first to examine the rounding of analysts' EPS forecasts of Singapore firms. It extends the literature on analyst EPS forecasts and highlights how the phenomenon of rounding of analyst EPS forecasts of US firms extends to Singapore.

Details

Asian Journal of Accounting Research, vol. 6 no. 1
Type: Research Article
ISSN: 2443-4175

Keywords

Article
Publication date: 19 June 2007

Robert B. Ericson

The paper aims to explain the background and to discuss the implications for broker‐dealers of US Circuit Court of Appeals for the District of Columbia March 30, 2007 decision in…

Abstract

Purpose

The paper aims to explain the background and to discuss the implications for broker‐dealers of US Circuit Court of Appeals for the District of Columbia March 30, 2007 decision in Financial Planning Association v. Securities and Exchange Commission (FPA) vacating Rule 202(a)(11), which had exempted fee‐based brokerage accounts from the Investment Advisers Act of 1940 (the Advisers Act) under certain conditions.

Design/methodology/approach

The paper explains how the distinction between broker‐dealers and investment advisers seemed relatively clear in the past, how fee‐based brokerage accounts began to blur that distinction, how Rule 202(a)(11) allowed broker‐dealers to offer fee‐based brokerage accounts without complying with the Adviser's Act under certain conditions, how the FPA decision vacates Rule 202(a)(11), and potential consequences of the FPA decision for broker‐dealers.

Findings

The paper finds that if FPA stands, it will have broad implications for broker‐dealers that offer fee‐based brokerage accounts, as the Advisers Act contains a variety of requirements that do not apply to traditional brokerage accounts. Broker‐dealers should assess their fee‐based programs and develop strategies for complying with the provisions of the Advisers Act or restrict their programs to remove them from the reach of the Act.

Originality/value

Written immediately after the FPA decision, this paper provides essential guidance to broker‐dealers on how they will have to reposition their fee‐based programs if that decision stands.

Details

Journal of Investment Compliance, vol. 8 no. 2
Type: Research Article
ISSN: 1528-5812

Keywords

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