Home About Latest Browse RSS Advanced Search

Board of Governors of the Federal Reserve System (U.S.)
Finance and Economics Discussion Series
Information and Liquidity of OTC Securities : Evidence from Public Registration of Rule 144A Bonds
Song Han
Alan G. Huang
Madhu Kalimipalli
Ke Wang
Abstract

The Rule 144A private debt represents a significant and growing segment of the U.S. bond market. This paper examines the market liquidity effects of enhanced information disclosure induced by the public registration of 144A bonds. Using the regulatory version of TRACE data for the period 2002-2013, we find that following public registration of 144A bonds, dealer-specific effective bid-ask spreads narrow, especially for issues with higher ex-ante information asymmetry. Our results are consistent with existing theories that disclosure reduces information risk and thus improves market liquidity.


Download Full text
Cite this item
Song Han & Alan G. Huang & Madhu Kalimipalli & Ke Wang, Information and Liquidity of OTC Securities : Evidence from Public Registration of Rule 144A Bonds, Board of Governors of the Federal Reserve System (U.S.), Finance and Economics Discussion Series 2018-061, 30 Aug 2018.
More from this series
JEL Classification:
Subject headings:
Keywords: Rule 144A bond ; Public registration ; Information disclosure ; Broker-dealers ; Liquidity
DOI: 10.17016/FEDS.2018.061
For corrections, contact FRB Librarian ()
Fed-in-Print is the central catalog of publications within the Federal Reserve System. It is managed and hosted by the Economic Research Division, Federal Reserve Bank of St. Louis.

Privacy Legal