Information and liquidity of over-the-counter securities: Evidence from public registration of Rule 144A bonds

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We examine the market liquidity effects of enhanced information induced by the public registration of 144 A bonds, a significant and growing segment of the U.S. bond market. Using the regulatory version of TRACE data for the 2002–2013 period, we find that liquidity measures improve consistently for higher ex-ante information asymmetry issues following public registration of 144 A bonds. Our results support that disclosure improves liquidity in the OTC bond market.