A study on Comparative Analysis related to Australian Insider Trading Regime

Despite the development of the insider trading regulation for the last few decades, debates on insider trading activity and efficacy of the insider trading regime are still remaining. Indeed, very few persons have been prosecuted for insider trading since insider trading was introduced, and only small number of offenders have been successfully convicted. Surprisingly, compared to other countries, the Australian judiciary is maintaining a relatively wide scope of insider trading offence grounded on “market fairness and market efficiency” policy. For example, the Corporation Act 2011 penalises persons for insider trading, no matter where private information comes, so far as it is characterised as material non-public one. The primary problem with respect to the Australian insider trading regime is that the definition of the elements of insider trading is not clearly stated in the Act. As a consequence, market professionals and investors are likely to fall into confusion, which might hinder investments in the securities market. Eventually, such phenomenon would bring about Australian financial market lagging behind that of other countries. Accordingly, to begin with, the definition and rationale of insider trading will be examined. In particular, the scope of inside information will be explored thoroughly, and a main focus will be drawn to issues concerning the scope, which is the most critical point in regulating insider trading. Then, the shortcomings of the Australian insider trading regime will be pointed out, and criticized. Also, this essay will seek to suggest steps that should be taken to improve the insider trading regime especially related to korean regulatory system.