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The purpose of this paper is to investigate if there is any impact of reporting delays on profitability of front-running strategies against the mutual funds.

The author studies if freshness of mutual fund holding information from public disclosures affects precision of flow-based front-running strategies against the funds and if the allowed 60-day reporting delay is able to protect the funds from these front-running activities against them.

Assuming no reporting delay, the author finds that returns from hypothetical front-running strategies are significant, when these are based on the most recent holding information and are not significant, when based on relatively old holding information. Interestingly, these front-running returns appear to be mostly driven by anticipated forced buys by the mutual funds (rather than anticipated forced sales). The return from a front-running strategy long on anticipated forced buys is higher when it is based on relatively illiquid assets. The author also finds that return from a front-running strategy short on anticipated forced sales is significant, when it is based on illiquid assets from relatively old holding information.

Hence, it appears that the allowed 60-day reporting delay is able to protect most of the funds from front-running activities against them, except for the funds holding illiquid assets from anticipated forced sales motivated front-running activities against them.

The paper addresses an interesting question, which has not been studied before – if freshness of fund holding information helps the front-running strategies against the funds and if the allowed reporting delay is effective in protecting the funds from these activities.

Emerging market, like India, is characterised by poor institutional structure, weaker regulations and higher information asymmetry which may lead to stock price manipulation. This study shed some light on such manipulation by investigating front-running behaviour around the bulk deals of stocks traded at the National Stock Exchange (NSE) from 2010 to 2019.

The authors employ an event study methodology to identify front-running in pre-event period of bulk deals. The bulk deals are classified into Only Buy, Only Sell, Partial Buy and Partial Sell trades. They are further subsampled based on the category of investors. Through cross-sectional regression, the authors also identify factors explaining such front-running.

The results show that the front-runners can achieve 5%–7% returns within a week around the event day. Abnormal Returns (AR) before the deals are higher for “Buy” deals than “Sell” deals. The authors also examine the role of volume and delivery in explaining the AR and cumulative abnormal returns (CAR). Lagged CAR, change in volume and change in delivery explain the AR. The results are robust after controlling for Bullish and Bearish Periods.

To the best of authors’ knowledge, this is the first study that explores the front-running in “Partial Buy” and “Partial Sell” bulk deals. Further, it investigates whether the category of investors has any role in front running. It empirically tests the asymmetric market reaction between “Buy” and “Sell” trades. Finally, it examines the role of volume and delivery in front-running.

The purpose of this paper is to investigate the impact of competition in financial markets on the frequency of portfolio disclosures by mutual funds and its implications for consumer search costs.

The empirical analysis merges the Center for Research in Security Prices (CRSP) survivorship bias-free mutual fund database, the Thompson Financial CDA/ Spectrum holdings database and the CRSP stock price data. The sample covers the time period between 1993 and 2010 and OLS and logistic regressions are used to investigate the impact of competition on fund disclosures.

This paper finds that mutual fund disclosures decrease with market competition and this effect is amplified for funds holding illiquid assets. These results provide empirical support for the findings of Carlin et al. (2102). Mutual funds use portfolio disclosures as a marketing tool to attract investments in a tournament-like market, where superior relative performance and greater visibility are rewarded with convex payoffs. With competition, the likelihood of receiving new investments decreases for each fund and funds respond by reducing costly voluntary disclosures. The disclosure costs are higher for funds holding illiquid assets, and hence, the effect is stronger for them.

This paper has important policy implications for disclosures in a market where relative performance matters. The traditional view is that competition induces voluntary disclosure because entities would like to differentiate themselves from competitors, and hence, competition should increase market transparency. However, this paper sheds light on the negative consequence of competition in a tournament-like mutual fund market.

The history of online trading began in the 1960s with the emergence of electronic communication networks, which allowed the electronic execution of trades outside traditional exchanges. The internet revolution led to the development of online brokerage platforms such as E*Trade and Schwab, enabling non-institutional investors to participate in the digital trading revolution. These platforms have evolved to serve the retail investor market, eventually adapting to mobile-first and commission-free models, significantly lowering the barriers to entry for financial markets. Platforms like Robinhood and other fintech firms have rapidly gained market share by offering services and products previously unavailable, such as commission-free trades, mobile trading, and novel products such as fractional shares and cryptocurrency investing. This chapter provides an overview of the history of online trading. It also introduces several new developments in fintech and the online trading industry and discusses various controversies and future implications of new technologies.

This paper aims to investigate feedback trading and autocorrelation behavior in the cryptocurrency market.

It uses the GJR-GARCH model to investigate feedback trading in the cryptocurrency market.

The findings show a negative relationship between trading volume and autocorrelation in the cryptocurrency market. The GJR-GARCH model shows that only the USD Coin and Binance USD show an asymmetric effect or leverage effect. Interestingly, other cryptocurrencies such as Ethereum, Binance Coin, Ripple, Solana, Cardano and Bitcoin Cash show the opposite behavior of the leverage effect. The findings of the GJR-GARCH model also show positive feedback trading for USD Coin, Binance USD, Ripple, Solana and Bitcoin Cash and negative feedback trading for Ethereum and Cardano only.

This paper contributes to the literature by extending Sentana and Wadhwani (1992) to explore the presence of feedback trading in the cryptocurrency market using a sample of the most active cryptocurrencies other than Bitcoin, namely, Ethereum, USD coin, Binance Coin, Binance USD, Ripple, Cardano, Solana and Bitcoin Cash.

The purpose of this paper is to explore the source of apparent abnormal returns accrued by “green” company stocks. Though one cannot completely rule out that market-to-book and size factors may already capture the information of Trucosts’ total damage measure, the authors attempt to attribute the effect to risk, a persistent desirable characteristic or a short-run attention effect.

The authors construct portfolios of stocks using the Trucost data for identifying more environmentally friendly companies. The authors then compare the risk-adjusted returns of the green portfolios to the non-green portfolios. A secondary analysis of the price impact of being listed on the Newsweek green company listed is used to determine attention effects.

The authors find that green stock returns outperform the most polluting stocks by 3.7 percent per year on a risk-adjusted basis. The evidence is most consistent with a significant but economically small attention effect coupled with a longer lasting and greater magnitude desirable characteristic driving green returns. The authors do not find evidence of a risk-contribution to the performance after controlling for well-known factors.

Fund managers may benefit from this research in selecting green stocks, and thereby enhancing investment performance, with desirable characteristics without fear of increasing risk.

One social implication is that investing in sustainable and green firms may not only be beneficial for the common good but also for the investor. Increased capital flows, and hence lower borrowing costs, for green firms may assist in creating a more ecologically sustainable economy.

To the authors’ knowledge this paper unique in attempting to determine if the green premium is a short-run inefficiency resolved by attention or a result of a desirable characteristic.

The purpose of this paper is to investigate whether there are information leaks immediately before CEOs change and – if so – whether some investors take financial advantage of such prior knowledge. It thirdly investigates the ethical, practical and professional options for communication managers to deal with such situations.

Working from sentiment theory of financial markets, the authors studied Internet search patterns for incoming CEO names and stock market movements immediately prior to the public mention or speculation of CEO change.

The authors find that in nearly a quarter of CEO changes at Fortune 500 companies, the name of the future CEO seems to have been leaked. Additionally, nearly half of those companies also experience extreme, otherwise unexplainable movements in the stock market.

This paper discovers the prevalence of extreme stock market movements for a company when the name of that company's next CEO has likely been leaked. Such leaks are an opportunity for unscrupulous investors, but they create ethical dilemmas for organizations. Communication managers typically respond by organizing tighter governance. However, to keep up with the speed of information and investments traveling through algorithms, organizing radical transparency could become an alternative instead.

The purpose of this paper is to examine the effectiveness of two regulatory initiatives in developing awareness of conduct risk associated with algorithmic and direct-electronic access (DEA) trading at broker-dealers: the UK Financial Conduct Authority’s algorithmic trading compliance in the wholesale markets and Commission Delegated Regulation 2017/589 (CDR 589) to the second Markets in Financial Instruments Directive.

A qualitative examination of 15 semi-structured interviews with representatives of London Metal Exchange member firms, their clients and regulators.

This paper finds that the key conduct related messages in algorithmic trading compliance in the wholesale markets may not yet be fully embedded at broker–dealers. This is because of a perceived simplicity of the algorithms deployed by broker dealers or, alternatively, a lack of reflection on their impact. Conversely, a concern exists that clients’ deployment of algorithms on DEA channels provided by broker–dealers increase conduct risk. However, the threat of harm posed by clients is not envisaged in current definitions of conduct risk. Accordingly, CDR 2017/589 does not currently require firms to evaluate clients’ awareness of it.

This study’s findings are limited to the insights provided by 15 participants.

This paper contributes to existing research by deepening understanding of conduct risk arising from algorithmic trading and DEA. To account for the potential harm arising from clients’ activities, this paper proposes a revision to Miles’s definition of conduct risk. This is complemented by a proposed amendment to CDR 2017/589 to require evaluation of clients’ understanding of conduct risk.

The timeliness of portfolio holdings information disclosure has been of interest among regulators, academics and practitioners since the Investment Company Act of 1940. The Securities Exchange Commission has been trying to strike a balance between investors' interest in timely disclosure and the potential costs associated with revealing the strategies of investment managers. The purpose of this paper is to investigate whether current rules regarding the delay in disclosure adequately protect investors, and prevent the formation of copycat portfolios that can profit from the research of the original portfolio manager.

The paper examine the effectiveness of different delays (30, 60 or 90 days) in disclosure of holdings for a sample of large‐cap, actively‐managed mutual funds. Copycat portfolios are constructed based on the holdings of the original portfolios, and their returns compared against the returns (net of expenses) of the original portfolios over the corresponding time frames.

The results indicate that the current delay of 60 days is sufficient to prevent such free‐riding; however, shortening the delay to 30 days would adversely affect mutual fund investors.

The paper aims to provide an answer to those debates on the effective delays in portfolio disclosure among academics and practitioners based on quantitative evidence. It also contributes to leave a guideline for regulators since the patterns of over‐ or under‐performance of the original portfolio returns vis‐à‐vis the copycat portfolio returns over varying delays provide important insights about possible effects of changes in disclosure regulations.