Information flows and smart disclosure of financial data: A framework for identifying challenges of cross boundary information sharing

• The paper outlines challenges to information sharing in financial market regulation.
• This paper adapts framework for information sharing to financial market regulation.
• This paper reviews & adapts literature in information sharing to financial market.
• This paper reviews practices & tools to support smart disclosure of financial data.
• This paper demonstrates the arguments using the case of BrightScope.
• This paper concludes by calling for attention to information science research.

The governance of financial markets in the U.S. is structured around financial products which in some cases results in overlapping regulatory responsibility, intricate and complicated relationships among the various parties and role confusion. These intricate relationships are often complicated by informal and ad-hoc information sharing practices across the regulators. This situation has been recognized as contributing to financial market risks and limiting the potential of smart disclosure policies to benefit financial market stakeholders. This paper adapts an existing framework for information sharing and integration to the complex environment of financial market regulation (FMR) to present an argument for the criticality of effective cross-boundary information sharing to financial regulators seeking to establish robust governance of financial markets. The framework is then used to outline the challenges to information sharing and integration in FMR and to help model the related information flows. Current literature and a recent study of information sharing in FMR are used to identify key actors in FMR information sharing relationships to outline the challenges faced in this unique context and the resulting risk if these challenges go unaddressed. In addition, this paper showcases an example of smart financial apps to illustrate the potential impact of information sharing and integration challenges on smart disclosure policies.