TY  - BOOK
AU  - Alimangohan, Lievj Raoni B.
TI  - Transparent disclosure and stock market liquidity: a legal and economic review of standards of materiality in merges and acquisitions 
PY  - 2016///
CY  - Cebu, City
PB  - University of Cebu
N1  - Thesis (Degree of Juris Doctor) -- University of Cebu-Banilad, 2016; Includes bibliographical references (leaves140-149)
N2  - Summary: Philippine securities laws and regulations are founded on the principle of full and fair disclosure of material information. This principle is reflected in the many provisions of the Securities Regulation Code, its Implementing Rules and Regulations and the Amended Disclosure Rules of the Philippine Stock Exchange requiring annual, periodic and current reports intended to apprise the investing public of any significant changes in the status of issuers and their securities. Such disclosure requirements ensure the preservation of the integrity of the stock market so that the investing public are able to place their trust and confidence in the said market.
 
Trust and confidence are essential to the success, growth and the very existence of the securities market.Without his trust and confidence, inventors would be discouraged from investing their money in corporations and securities. Without the flux of capital, business in the country becomes far more difficult and far less profitable. As such, to preserve this trust and confidence, securities laws and regulations impose the general obligation on insiders who have access to material information to make full and fair disclosures at appropriate times.
 
Unfortunately, on the specific issue of mergers and acquisitions, the current practice- which is to disclose only after  board approval of the merger plan- is plagued by significant legal and economic issues. Chief of which is the question of whether the timing of the disclosure is consistent with the standard of materiality in the Securities Regulation Code.
 
To resolve this issue, this paper unpacks the various legal and conceptual frameworks that animate the disclosure rules in Securities law. In particular, the paper explodes the existing legal theories and jurisprudential standards used for determining materiality. Specifically, the paper  analyzes the "agreement-in-principle" standard and the "probability-magnitude" principle. This review is done to determine the proper legal tests for materiality and disclosure in the context of mergers and acquisitions.
 
The paper also adopts and applies analytical frameworks in the field of Economics to test the financial viability of the legal standards crafted here.Specifically, this paper uses the Lemons Problem to highlight the risks and dangers of quality uncertainty and information asymmetry. Moreover, the paper applies Signaling Theory to show the positive correlation between transparent disclosure and stock market liquidity
ER  -