Recent and imminent changes to UK corporate law underscore the potential of corporate disclosure rules for modernising financial markets and advancing sustainable development goals. In practice, these changes have also been leading to more corporate disclosure of context-dependent and hard-to-quantify ‘soft information’, in particular through forward-looking and non-financial reporting. This article examines the impact of soft information reporting on the UK secondary financial markets and the algorithmic traders that increasingly populate them. It notes that different algorithmic trading strategies are variably equipped to deal with the increase in soft information disclosure stemming from recent and upcoming UK corporate law reform. Specifically, it argues that increased soft information disclosure poses particular challenges for announcement algorithmic trading but offers new opportunities to fundamental algorithmic trading. Because announcement algorithmic trading is broadly undesirable, this is a welcome, if seemingly unintended, consequence of reform. It also illustrates the value of corporate disclosure rules in complementing existing algorithmic trading regulation to improve the efficiency of modern financial markets, in the UK and beyond.
European Business Law Review