8.10 Insider dealing

Insider trading/dealing

It occurs when a person buys/sells securities while knowingly in possession of certain confidential information which is not available to the public and which if available would materially affect the price of the securities.

Insider trading is regulated by the capital market Act Cap 486A and only applies to public company listed on the securities exchange and has no application to private companies unless they are subsidiaries of public company.

The objective of insider trading is either makes a profit or a void a loss by taking advantage of insider information.

The information that is likely to impact on the prices of securities is referred to as material information and it includes information on possible mergers earnings and dividend of an unusual nature, the acquisition or loss of a significant contract, a significant new product or discovery, a change in control i.e. significant change in management, a significant suit against the issuer etc.