The Faculty of Finance at the City University of Macau held the ninth academic salon of this academic year on January 8, 2025, in room L305 on the Taipa campus. The seminar invited two experts, Xiong Haoyang and He Yu, to give presentations. Xiong Haoyang's topic was "Do Corporate Insiders Take Advantage of Their Political Connections? Evidence from Insider Trading," while He Yu's topic was "Mark-up Disclosure and Trading Costs in the Municipal Bond Market."

Dr. Xiong Haoyang, currently an Assistant Professor in the Department of Finance at Montana State University, presented his paper titled "Do Corporate Insiders Take Advantage of Their Political Connections? Evidence from Insider Trading." This paper uses employment data of corporate insiders to study the impact of political connections on their trading behavior. It finds that purchases (sales) by politically connected corporate insiders are associated with lower (higher) abnormal returns compared with non-politically connected insiders, indicating that politically connected insiders are generally cautious about potential legal risks. This effect is more significant among purchases. The study also finds that politically connected insiders are more likely to have longer trading horizons and are more likely to make routine trades. The Stop Trading on Congressional Knowledge (STOCK) Act, passed in April 2012, effectively decreases (increases) the abnormal returns associated with insider purchases (sales) made by Congress members and staff in short horizons.

He Yu, a Chartered Financial Analyst, presented his paper titled "Mark-up Disclosure and Trading Costs in the Municipal Bond Market." This paper examines the change in trading costs by effective spreads and "waterfall" mark-ups around the mark-up disclosure rule and further explores the mechanism. In 2018, the Municipal Securities Rulemaking Board implemented a mark-up disclosure rule to strengthen post-trade transparency. Broker-dealers were required to disclose mark-ups to retail investors on the confirmation page. The paper finds that trading costs for retail investors decreased after the approval and effective date of the mark-up disclosure rule. The results suggest that the information asymmetry between broker-dealers and retail investors may have diminished as a result of this rule. To further explore the mechanism, the reduction in trading costs is more pronounced for frequently traded municipal bonds, while there is no significant change for infrequently traded bonds. This suggests that frequently traded bonds benefit more from the rule due to the easier access to a comparable fair market price.

In this academic salon, Xiong Haoyang and He Yu shared their latest research findings with the Faculty of Finance, broadening the academic scope of the faculty. The Faculty of Finance Academic Salon at the City University of Macau is a platform for exchanging academic ideas and enhancing academic awareness. We focus on finance, inviting experts from academia and the financial industry to discuss cutting-edge research and share industry development trends, aiming to bring new academic experiences and thinking models to the faculty and students of the university. We hope that through academic activities like the academic salon, we can provide a better academic platform for graduate students and encourage further exploration and research of academic issues among faculty and students.