Corporate and institutional control over the dissemination of price sensitive information

Abstract

This article explores how companies and financial institutions used their private relationship channels and contacts to encourage compliance with the 1994 UK Stock Exchange guidance on the dissemination of price sensitive information to the stock market. Extensive case data is used to identify and illustrate this private self regulation process. The companies and institutions developed ‘mirror image’ themes in their approaches to self regulating the corporate release and institutional receipt of price sensitive information. Both parties conducted this self regulation within their regular contacts and links and as part of their strategic decision processes. These matching self regulatory themes provide a simple typology which reveals the spectrum of possible responses across the corporate and institutional cases. The self regulatory process is interpreted within finance theory and within institutional organizational theory. Finally, the paper examines how the self regulatory mechanism contrasts with and interacts with the more explicit and well known market and legal mechanisms.

Keywords:

• Price
• Sensitive
• Information
• Self
• Regulation
• Relationships