Is Effective Junior Equity Market Regulation Possible?

26 Pages Posted: 25 Dec 2013

See all articles by J. Ari Pandes

J. Ari Pandes

University of Calgary - Haskayne School of Business

Michael J. Robinson

University of Calgary - Haskayne School of Business

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

Pandes, J. Ari and Robinson, Michael J., Is Effective Junior Equity Market Regulation Possible? (December 23, 2013). Financial Analysts Journal, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2371301

J. Ari Pandes (Contact Author)

University of Calgary - Haskayne School of Business ( email )

2500 University Drive NW
Calgary, Alberta T2N 1N4
Canada
403 220-4350 (Phone)

Michael J. Robinson

University of Calgary - Haskayne School of Business ( email )

2500 University Drive, NW
Calgary, Alberta T2N 1N4
Canada

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