Rajah & Tann Regional Round-Up
your snapshot of key legal developments in Asia
Issue 2 - Apr/May/Jun 2022
 

Insider Trading – What Directors of Public Listed Companies Need to Know

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:


  1. What are the specific rules that govern their share trading?
  2. When can Directors buy or sell shares of companies on whose boards they sit?
  3. Can a Director be in breach of insider trading laws even if he individually does not trade but instead shares confidential information with others?
  4. 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.



Please note that whilst the information in this Update is correct to the best of our knowledge and belief at the time of writing, it is only intended to provide a general guide to the subject matter and should not be treated as a substitute for specific professional advice.

 

Christopher & Lee Ong
Level 22, Axiata Tower ,
No. 9 Jalan Stesen Sentral 5
Kuala Lumpur Sentral,
50470 Kuala Lumpur, Malaysia
www.christopherleeong.com


Contacts:

Yon See Ting
Partner
D +603 2278 8311
F +603 2278 8322
see.ting.yon@christopherleeong.com

Lee Hock Chye
Managing Partner
D +603 2273 1919
F +603 2273 8310
hock.chye.lee@christopherleeong.com

Fiona Sequerah
Partner
D +603 7958 8310
F +603 7958 8311
fiona.sequerah@christopherleeong.com

Lim Wee Hann
Partner
D +65 62320606
wee.hann.lim@rajahtann.com

Yau Yee Ming
Partner
D +603 2278 8311
F +603 2273 8322
yee.ming.yau@christopherleeong.com

Kuok Yew Chen
Partner
D +603 7958 8310
F +603 7958 8311
yew.chen.kuok@christopherleeong.com

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This update is solely intended to provide general information and does not provide any advice or create any relationship, whether legally binding or otherwise. Rajah & Tann Asia and its member firms do not accept, and fully disclaim, responsibility for any loss or damage which may result from accessing or relying on this update.