We collect trade data including daily volume and bid–ask spread to assemble a unique data set at individual firm level from S&P 500 firms.

We analyze the firms’ bid–ask spread and volume before and after issuing the regulation.

The results from our panel data analyses indicate that bid–ask spread has decreased by about 5% in response to the new regulation.

This result holds mainly for firms that are high-tech, consistent with them being in greater need of this additional information disclosure channel.