Studying the Regulatory Framework and Implementation of the Principle of Fair and Equitable Treatment of Shareholders by Issuers in Tehran Stock Exchange

Document Type : Research Paper

Authors

1 PhD. Candidate, Department of Financial Management, Faculty of Management and Accounting, Farabi Campus of University of Tehran, Qom, Iran.

2 Associate Prof.Department of Accounting, Faculty of Management and Accounting, Farabi Campus of University of Tehran, Qom, Iran.

3 PhD. Department of Banking and Finance, University of Manchester, Manchester, United Kingdom.

4 Assistant Prof., Department of Private Law, Faculty of Law, South Tehran Branch, Islamic Azad University, Tehran, Iran.

Abstract

Objective: Ensuring fair and equitable treatment of shareholders can pave the way for an efficient, fair and transparent market. The purpose of this study is to examine the adequacy and implementation of the regulations related to fair and equitable transactions between shareholders and issuers.
Methods: In this study, principle 17 of IOSCO Objectives and Principles of Securities Regulationon Fair and Equitable Treatment of Shareholders are reviewed, and the analysis showed that the Iran-US regulatory framework is in line with the standards of this principle. In this process, the weaknesses of the existing regulations appear. In the following, with a quantitative approach, using the questionnaire tool and designing the hypothesis test, the extent of implementation of the existing rules and regulations has been investigated.
Results: The three key themes highlighted in the IOSCO document are: fundamental rights of shareholders, reporting of transactions affecting the control and reporting of inside information holders. The most important structural weakness of the regulations in this field, is neglecting the transactions affecting the control of the company. While US regulations have precise requirements for tracking and reporting such transactions. In general, the extent of disclosure in US is more than Iran.
Conclusion: In implementing the existing laws and regulations, in the area of ​​fundamental rights of shareholders, except for the payment of dividend, implementation of laws and regulations was approved in other sectors. However, there were serious problems in the reporting of insiders, and none of these hypotheses were confirmed with the relevant sub-assumptions.

Keywords

References

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Financial Research Journal
Volume 22, Issue 1
2020
Pages 44-68

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