Public Utility Underwriting Costs and Regulatory Climate: An Examination of PUC and SEC Multiple Jurisdictions

Raymond Gorman; Martin Grace; Gautam Vora

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Journal article

Public Utility Underwriting Costs and Regulatory Climate: An Examination of PUC and SEC Multiple Jurisdictions

Raymond Gorman, Martin Grace and Gautam Vora

Yale journal on regulation, Vol.10(1), pp.17-61

01/01/1993

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Abstract

The issuance of securities by public utilities is regulated at both the federal level by the Securities and Exchange Commission (SEC) and at the state level by state public utility commissions (PUCs). In this Article, Professors Gorman, Grace, and Vora critically assess the impact of these overlapping regulatory jurisdictions. Generally, the SEC and some PUCs require utilities to award underwriting contracts through a process of competitive bidding. While this requirement disciplines managers, the authors observe that under a competitive bid regime, an investment bank lacks the information to certify adequately a stock issuance. The absence of adequate certification contributes to underpricing, which adversely affects current shareholders.

Economics of Regulation (L51)

Financing Policy, Financial Risk and Risk Management, Capital and Ownership Structure, Value of Firms, Goodwill (G32)

Industry Studies: Transportation and Utilities: General (L90)

Northern America

U.S

Details

Title: Subtitle: Public Utility Underwriting Costs and Regulatory Climate: An Examination of PUC and SEC Multiple Jurisdictions
Creators: Raymond Gorman
Martin Grace
Gautam Vora
Resource Type: Journal article
Publication Details: Yale journal on regulation, Vol.10(1), pp.17-61
ISSN: 0741-9457
eISSN: 2376-5925
Number of pages: 45
Language: English
Date published: 01/01/1993
Academic Unit: Finance
Record Identifier: 9984701248402771

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