On disclosure, a continuing series
We all know that our securities regulatory regime is predominantly a disclosure regime, meaning the regulators, for the most part, don’t impose substantive regulations on securities issuers, but require only accurate, timely disclosure of certain information. And as against a more intrusive, substantive regime, I think this is preferable, even in its current, fairly intrusive form. But too often disclosure is presumed by commentators (and regulators) to be fairly costless — meaning that, even if it doesn’t do what it’s supposed to do, it imposes no great cost, and if it succeeds it does so quite cheaply. This is what Larry means when he refers to regulations as “chicken soup.” I think this presumption is often under-supported.