The effect of regulatory mechanisms on the financial behavior of investors

The formality, transparency, and legality of the market are some of the most important characteristics of stocks compared to other investment markets. The emergence of phenomena such as price bubbles in the stock market, the existence of excessive fluctuations in the stock price, and more or less the reaction of investors to new information, is against the efficient market theory. Monitoring and creating confidence for investors is one of the most important areas of capital market consolidation and development. The reason for not making the right decisions can be attributed to the weakness of the tools and laws of the capital market supervisory institutions. The stock exchange organization supervises the companies through supervisory mechanisms. In this research, the mechanisms of the base volume, the scope of the fluctuation range, and the propagation of internal control weakness have been studied. The statistical population of this research consists of companies admitted to the Tehran Stock Exchange, in which we investigated the effect of regulatory mechanisms on the financial behavior of investors. After analyzing the data collected from 2016 to 2021, the results of the hypothesis test of the research showed that the size of the base affects the decision-making of investors. In addition, the analysis of the research data indicates that the publication of the report on the weakness of internal control and the scope of fluctuation does not affect the decision-making of investors.