TITLE

The Time for Quant Is Now

AUTHOR(S)
Riepe, Mark W.
PUB. DATE
April 2005
SOURCE
Journal of Financial Planning;Apr2005, Vol. 18 Issue 4, p22
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
This paper offers a look at key regulatory changes in the U.S. from 1997-2005 and reviews their impact on investment research. Regulation Fair Disclosure was approved in 2000 by the Securities and Exchange Commission (SEC), the intent of this rule is to prevent company executives from becoming too chummy with their favorite research analysts or portfolio managers and selectively revealing important information before announcing the information to a broader audience. These days, the big institutional investors are increasingly seeking to de-link commissions from research costs and seek the lowest commissions possible. In January 1997, a new era began when the SEC approved new order-handling rules that led to the creation of electronic communications networks. Another source of funding for research activities is also under regulatory attack. The global settlement was an agreement among many of the big investment banks, the New York Attorney General, and the SEC regarding the various conflicts of interest exposed between the stock research of these firms and their investment banking activities. National Association of Securities Dealers Rule 2711 and New York Stock Exchange Rule 472 were enacted. The settlement and these rules change the nature of the research process as it has traditionally been practiced because it affects the revenue stream that supports the research effort.
ACCESSION #
16735437

 

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