Share repurchase regulations: do firms play by the rules?

Hamon, Jacques; Ginglinger, Edith

Hamon, Jacques; Ginglinger, Edith (2009), Share repurchase regulations: do firms play by the rules?, International Review of Law and Economics, 29, 2, p. 81-96

Type

Article accepté pour publication ou publié

External document link

http://halshs.archives-ouvertes.fr/halshs-00143974/en/

Date

2009

Journal name

International Review of Law and Economics

Volume

Number

Publisher

Sevenoaks

Pages

81-96

Metadata

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Author(s)

Hamon, Jacques
Ginglinger, Edith

Abstract (EN)

Open market share repurchases are strictly regulated to prevent companies from profiting from insider information. We examine compliance with these rules in France, where the mandatory disclosure of share repurchases provides detailed information on repurchases actually undertaken. Using a database containing 36,848 repurchases made by 352 French firms over the period 2000-2002, we show that very few firms fully comply with the regulations for all their buybacks. Non-compliance has an adverse effect on liquidity only for the smallest and least liquid firms.

Subjects / Keywords

Open market share repurchases; Insider trading; Regulations; Liquidity

JEL

K22 - Business and Securities Law
G18 - Government Policy and Regulation
G35 - Payout Policy