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The Anatomy of Corporate LawA Comparative and Functional Approach$
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Reinier Kraakman, John Armour, Paul Davies, Luca Enriques, Henry Hansmann, Gerard Hertig, Klaus Hopt, Hideki Kanda, Mariana Pargendler, Wolf-Georg Ringe, and Edward Rock

Print publication date: 2017

Print ISBN-13: 9780198739630

Published to Oxford Scholarship Online: March 2017

DOI: 10.1093/acprof:oso/9780198739630.001.0001

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PRINTED FROM OXFORD SCHOLARSHIP ONLINE (oxford.universitypressscholarship.com). (c) Copyright Oxford University Press, 2022. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in OSO for personal use.date: 28 January 2022

Corporate Law and Securities Markets

Corporate Law and Securities Markets

(p.243) 9 Corporate Law and Securities Markets
The Anatomy of Corporate Law

Luca Enriques

Gerard Hertig

Reinier Kraakman

Edward Rock

Oxford University Press

This chapter focuses on the regulation of corporations as “issuers,” that is, as tools to raise finance from the public. All representative “core jurisdictions” have specific rules applying to the offer of securities to the public and to the ongoing governance and disclosure of companies whose securities are held by the investing public. While motivated by the need to protect investors, their economic function is rather in supporting capital markets as an efficient tool to allocate capital among corporations. This requires that markets are informationally efficient and prices are sufficiently informative. After reviewing the reasons why legal rules are held to be necessary to attain of the goal of price informativeness, the chapter examines mandatory disclosure frameworks. It highlights similarities and differences in issuer disclosure rules, assesses the degree of convergence in accounting law, and describes the use of other strategies, including banning insider trading and market manipulation (i.e., securities fraud). Public and private enforcement and gatekeeper control are examined, highlighting the gap in enforcement intensity between the U.S. and other jurisdictions.

Keywords:   Issuers, securities, mandatory disclosure, informational efficiency, price informativeness, accounting law, insider trading, market manipulation, securities fraud, enforcement intensity

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