Volume 42 | Number 3 Summer 2007
Abstract
Globally, most jurisdictions use a disclosure-based system instead of a merit-based system in their securities law regimes. Disclosure enhances capital market efficiency through effective dissemination of information that is material to investor decisions, in turn facilitating the raising of capital in a cost-effective and timely manner. This article examines selective aspects of disclosure in securities law across numerous jurisdictions, specifically, how it serves as a public policy instrument in capital markets. It explores whether the current regulatory framework encourages “full, true, and plain” disclosure, concluding that the increasing complexity of products and the rapid growth in electronic-based disclosure offers both upside potential and downside risks to market integrity. The article also considers “materiality” as the standard for disclosure, including the interplay between statutory requirements and deference to business judgment by regulators and the courts.
Summary
- Introduction
- Disclosure as a Public Policy Instrument
- Full, True, and Plain Disclosure
- Electronic Disclosure as a Key Aspect of Enhanced Disclosure Regimes
- Materiality
- Interplay Between Business Judgment and Disclosure Obligations
- Development of an Electronic Integrated Market Disclosure Document
- Conclusion
Footnotes
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