Behavioral Economics and Securities Laws: The Theoretical Underpinnings of our Regulatory System and Their Application to Investor Sophistication
This thesis aims at giving an outlook of Canadian securities regulation through the lense of behavioral economics. The author develops it in two times: first, he poses the theoretical underpinnings of the Canadian regulatory system, mostly based on a presumption of investor rationality and the theoretical challenges that have been raised against this presumption. Secondly, he applies these competing theoretical frames to a set of securities rules, i.e. prospectus-exempt distributions and distributions of securitized products. He concludes by presenting an example of behavioral-oriented rules, and discussing why adapting the Canadian rulebook to these theoretical changes might be relevant.
Behavioral economics, Behavioral finance, Canadian securities laws, Financial regulation, Investor sophistication, Securities
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