Theme：The Effect of Pre-trade Disclosure Regulation on Insider Trading and Stock Market Efficiency

Lecturer: Kai Guo, Assistant Professor, Shanghai Jiaotong University

Time：2022.06.09 10:00

Site：Tecent meeting 182 863 342

Abstract:

We test the impact of a pre-trade disclosure regulation in China, which requires corporate insiders to disclose their stock sale (but not stock purchase) plans prior to trade execution, on insider trading and stock market efficiency. The regulation significantly reduces information-driven insider sales. The stock market reacts negatively to observed insider stock sale plans, leading to a higher likelihood of insiders’canceling such stock sale plans. Despite the reduction of informed insider sales, stock price informativeness actually increases following the regulation, partially due to increased analyst following in stocks with negative future performance.

Introduction to the lecturer:

Kai Guo is an assistant professor in the Accounting Department of Antai College of Economics and Management, Shanghai Jiaotong University. He graduated from the National University of Singapore Business School in 2021 with a Ph.D. His research interests are related to capital markets, including corporate disclosure, corporate governance, insider trading, etc.