Is Effective Junior Equity Market Regulation Possible?
26 Pages Posted: 25 Dec 2013
Date Written: December 23, 2013
Abstract
This study examines Canada’s Capital Pool Company (CPC) program, a regulated blind pool program, since its inception in 1986. We show that the CPC regulations increased the quality of junior equity firms going public, the quality of underwriters taking these firms public, and significantly reduced the incidence of fraud in this marketplace. Overall, our study finds that effective regulation can help to create a viable junior equity market that facilitates the development of smaller firms.
Keywords: Junior Equity Market, IPO, Fraud, Regulation, Capital Pool Company
JEL Classification: G32, G34, G38
Suggested Citation: Suggested Citation