The stated intent of Regulation FD was to create a level playing field between all market participants by requiring publicly traded companies to widely and publicly disseminate all material information.By restricting selective pre-earnings announcement guidance to analysts, there is now equal access to company-specific information not only between the general investing public and analysts but also between competing analysts. I examine the differential impact of the regulation on the forecast accuracy of superior, average, and inferior analysts. I find that the forecast accuracy has declined for each group and that on a relative basis, inferior (superior) analysts performance has improved (deteriorated) subsequent to the implementation of Regulation FD. My findings suggest that selective guidance provides some explanation for the differential forecasting ability of analysts prior to the implementation of Regulation FD.I also examine the impact of Regulation FD on the ability of a model to forecast which analysts will be the most accurate with their earnings forecast estimates. I find that since Regulation FD has been implemented these models have increased their ability to predict which analysts will make the most accurate forecasts.ii

The increases in volatility after stock splits have long puzzled researchers. The usual suspects of discreteness and bid-ask spread do not provide a complete explanation. We provide new clues to solve this mystery by examining the trading of when-issued shares that are available before the split. When-issued trading permits noise traders to compete with a more homogenous set of traders, decreasing the volatility of the stock before the split. Following the split, these noise traders reunite in one market and volatility increases. Thus, the higher volatility after the ex date of a stock split is a function of the introduction of when-issued trading, the new lower price level after the split date, and the increased activity of small-volume traders around a stock split. 2004 The Southern Finance Association and the Southwestern Finance Association.

No abstract

No abstract

No abstract