Table of Contents



The Definition of Insider Trading

Difficulties with the Definition of Insider Trading

Statement of the Definition

The Operation of the Current Legislative Provisions Prohibiting Insider Trading


Complexity of Current Insider Trading Law

Jurisdictions of the Insider Trading Prohibitions

Who is an Insider?

What is Inside Information?

Possession of Insider Information

Material Effect of Information

When is Information Generally Available?


Legislative History of Generally Available

The Publishable Information Test

Readily Observable

Deductions, Conclusions or Inferences and Market Analysts

Securities and Financial Products

The Requisite Mental State

The Transactions to Which the Prohibited Conduct Applies



Communicating (‘Tipping’)

The Efficacy of the Operation of the Current Provisions


The Exceptions and Defences to the Prohibition



The Various Use of the Terms ‘Exceptions’ and ‘Defences’

The Burden of Proof for the Operation of Exceptions and Defences

The Provenance of the Exceptions and Defences

The Legislative Exceptions to the Prohibition

Withdrawal from a Registered Scheme

Underwriting Agreements

Purchases Pursuant to Legal Requirement

Communication Pursuant to Legal Requirement

Chinese Walls

Exception for Knowledge of Person’s Own Intentions or Activities

The Exceptions under the Corporations Regulations

Director Obtaining a Share Qualification

Acquisition of Securities under a Superannuation or Pension Fund Scheme

Specified Insolvency Transactions in Good Faith

Sale Under a Mortgage, Charge, Pledge or Lien

The Statutory Defences

Reform of Defences


Penalites and Remedies


Who may be the Subject of an Action?

Primary Liability as an Insider

Ancillary Liability

Criminal Consequences for Insider Trading

Initiating Prosecutions

Penalities for Insider Trading

Disqualification from Directorships/Managing a Corporation

Proceeds of a Crime

The Practical Operation of the Criminal Sanctions – Hannes and Rivkin


R v Hannes

R v Rivkin

Civil Remedies


Sections 1043L and 1317HA

The Trigger for Compensation

Specific Circumstances for the Order of Compensation

Civil Penalties

Nature of Civil Penalties

Declaration of Contravention

Pecuniary Penalty

Disqualification and Civil Penalties

Effectiveness of Civil Penalty Provisions

The Future Role of Civil Penalties


Enforcement and the Interrelationship Between Insider Trading and Continuous Disclosure


Problems of Enforcement


Frequency of Insider Trading

Difficulties of Detection

An Inefficient Regulator?

The Complexity of the Legislation and the Inadequacy of Penalties

The Interrelationship Between Continuous Disclosure and Insider Trading

Overview of Suggested Solutions to Problems of Enforcement

The Continuous Disclosure and Insider Trading Provisions

The Theoretical Underpinnings of Australia’s Mandatory Disclosure Regime

Disclosing Entities and Entities Exempted From Continuous Disclosure

Entities Which Must Make Continuous Disclosure

Disclosure Requirements on Listed Disclosing Entities

The Disclosure Requirements for Unlisted Disclosing Entities

Information Which Must Be Disclosed

Australian Stock Exchange Listing Rules on Continuous Disclosure


The Operation of the Listing Rules in Respect to Continuous Disclosure

The Exception to the Disclosure Requirement

Structured/Periodical Disclosure

Enforcement of the Continuous Disclosure Requirements

Engendering a ‘Culture of Discussion’

Proposals for the Administrative Enforcement of Continuous Disclosure


Appendix One: Table of Australian Insider Trading Cases

Criminal Prosection

Civil Litigation




Case Law


Other material

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