Evidence on UK directors' compliance with disclosure timing regulations

Brian Balmforth, Bruce M. Burton, Stuart R. Cross and David M. Power

Journal of Financial Regulation and Compliance, 2007, vol. 15, issue 4, 381-393

Abstract: Purpose - This study aims to examine the extent to which UK directors failed to report their share trading in the timeframe required by extant regulations in the run‐up to the changes in insider trading law contained in the Financial Services and Markets Act. Design/methodology/approach - The study investigates the extent of non‐compliance amongst the 7,461 trades reported to the London Stock Exchange by the directors of UK firms in the year 2000. Findings - The results indicate that 1,055 (or 14 per cent) of directors' trades were reported late (or with the transaction date absent), with these being concentrated amongst “buy” transactions in both absolute and pro‐rata terms. Practical implications - The evidence suggests that non‐compliance in the reporting of directors' transactions was common at the time when UK authorities chose to toughen the legal framework governing the conduct of trading based on private price‐sensitive information. Once sufficient time has elapsed, further studies should be able to provide evidence about the iterative impact of the new legal framework by comparing results with the findings of this study. Originality/value - This is the first study to report a detailed examination of the extent of non‐compliance in the timing of directors' trades in their own equity.

Keywords: Insider trading; Compliance costs; Disclosure; Directors; Financial reporting (search for similar items in EconPapers)
Date: 2007
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:jfrcpp:v:15:y:2007:i:4:p:381-393

DOI: 10.1108/13581980710835245

Access Statistics for this article

Journal of Financial Regulation and Compliance is currently edited by Prof John Ashton

More articles in Journal of Financial Regulation and Compliance from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().