Insider trading has been subject to increased regulatory scrutiny in the Malaysian market over the past decade, posing several important questions for those who are privy to confidential information.
Some of the most common issues facing Directors of public listed companies (PLCs) include:
- What are the specific rules that govern their share trading?
- When can Directors buy or sell shares of companies on whose boards they sit?
- Can a Director be in breach of insider trading laws even if he individually does not trade but instead shares confidential information with others?
- Are Directors the only ones at risk of being in breach of insider trading prohibitions?
These are issues that often face those who deal with inside information, particularly Directors and company advisers such as lawyers and investment bankers. The two-part article provides an insight into the law governing insider trading under the Capital Markets and Services Act 2007 ("CMSA") which will enable Directors and other corporate insiders to stay on the right side of the law.
The article describes how the Malaysian courts have dealt with materiality of information for purposes of the CMSA, when information is regarded as generally available, and how tipping is regarded in law even when the tipper himself does not trade. An analysis has also been provided on the interface between the CMSA and Bursa Malaysia’s rules on closed period trading. Given that both civil and criminal actions can be taken for breaches of the law, this article includes case updates on how the law has been applied by the courts.
For more information, click here (for Part 1) and here (for Part 2) to read our Legal Updates.
