This report was produced by the Corporations and Markets Advisory Committee. View further information about the Committee and it's other publications.
Background
Australia has one of the broadest prohibitions of insider trading in financial products in the world. While there is wide support for a firm approach in this area, and some concern that the present laws may not be effective enough, there is less clarity about what should be prohibited. Moreover, some tensions in the application of the insider trading provisions have arisen from amendments in March 2002 that considerably extended the range of financial products covered by those laws.
Scope of the review
The Advisory Committee has reviewed the insider trading provisions in the light of experience since their current structure was formulated in 1991. The Committee has identified a number of respects in which those laws could be strengthened and clarified in order better to achieve their objective. The Committee has also identified potentially serious problems that stem from the marked expansion in 2002 of the markets and products to which the insider trading prohibition applies, and puts forward proposals to tailor the prohibition better to the circumstances of those markets.