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Full-Text Articles in Law
Passive Exit, Joshua Mitts
Passive Exit, Joshua Mitts
Faculty Scholarship
In recent years, securities lending — making shares available for borrowing by short sellers who “sell first and buy later” — has been an object of increasing regulatory attention. Securities lending is linked to the growth of passive investing because large, buy-and-hold passive investors are among the largest lenders of portfolio securities. But relatively little is understood about the relationship between securities lending and passive investing. In this Article, I show how securities lending allows passive investors to generate revenue from a decline in the value of their investment portfolios in addition to borrowing fees determined by demand from the …
The Mechanisms Of Market Efficiency, Ronald J. Gilson
The Mechanisms Of Market Efficiency, Ronald J. Gilson
Faculty Scholarship
Of all recent developments in financial economics, the efficient capital market hypothesis ("ECMH") has achieved the widest acceptance by the legal culture. It now commonly informs the academic literature on a variety of topics; it is addressed by major law school casebooks and textbooks on business law; it structures debate over the future of securities regulation both within and without the Securities and Exchange Commission; it has served as the intellectual premise for a major revision of the disclosure system administered by the Commission; and it has even begun to influence judicial decisions and the actual practice of law. In …