PhD Research Proposal Presentation: Tomas Milo

Two Essays on SEC Reporting Rules

Friday, December 12, 2025, at 12:30pm

Tomas Milo, a doctoral student at McGill University in the area of Accounting will be presenting his research proposal entitled:

(The presentation will be conducted on Zoom)

Student Committee chair: Professor Hongping Tan and Professor Dongyoung Lee

ABSTRACT

This thesis comprises two essays that examine the consequences of Securities and Exchange Commission (SEC) reporting rules on capital market participants and corporate behavior.

In the first essay, I investigate the impact of the SEC’s 2017 mandate requiring Foreign Private Issuers (FPIs) using IFRS to file annual reports in XBRL format. Leveraging this regulatory setting, I document a significant increase in individual ownership for FPIs subject to the mandate. Empirical tests provide evidence that this increase is mainly driven by local individual investors in the FPIs’ home countries, rather than foreign individual investors. The effect is more pronounced when the FPI’s home country exhibits higher financial literacy and when the XBRL filings are more informative.

In the second essay, I study how managers determine disclosure thresholds for environmental legal proceedings following the SEC’s 2020 modernization of Regulation S-K Item 103. This reform allows firms to replace a bright-line reporting threshold with a higher, firm-specific cutoff. I find that the new regime produces a bimodal distribution of disclosures where firms cluster at either the minimum or maximum permitted thresholds, consistent with a corner-solution equilibrium. Firms with larger environmental penalties and higher proprietary costs are more likely to adopt the maximum threshold to minimize disclosure. Using a difference-in-differences approach based on firms’ pre-reform violations, I show that firms whose violations become less likely to be disclosed under the higher threshold subsequently increase pollution levels.