scholarly journals European Insider Trading Theory Revisited: The Limits of the Parity-of-Information Theory and the Application of the Property Rights in Information Theory to Activist Investment Strategies

2020 ◽  
Vol 17 (5) ◽  
pp. 558-600
Author(s):  
Ana Taleska
Keyword(s):  
Information Theory ◽  
Property Rights ◽  
Insider Trading ◽  
Public Information ◽  
Investment Strategies ◽  
The European Union ◽  
Inside Information ◽  
Market Participants ◽  
Trade Offs ◽  
Securities Trading

AbstractParity-of-information is purported to be the single overarching policy rationale for the European Union (EU) regulation on insider trading. This is because securities trading on the basis of informational advantages is generally prohibited under EU rules, as is tipping (and issuers’ selective disclosure) of material, non-public information. Yet, EU regulations allow market actors, including investment professionals and analysts, that have discovered valuable information -and thereby, have an informational advantage vis-à-vis their trading counterparties- to trade on this information. Relatedly, issuers of financial instruments, takeover bidders and merging parties can share information with a selected group of investors prior to public announcement of the transaction (market sounding), whereas firms can delay public disclosure of inside information and prevent all other market participants from trading on this information. I argue that these exceptions from the parity-of-information theory are -from a doctrinal standpoint- best explained as property rights in information of market actors that have developed new proprietary information with respect to European listed securities. This article, therefore, aims at providing a property rights account of the exceptions to the parity-of-information theory and it illustrates the trade-offs between the parity-of-information and the property rights in information theories underlying European insider trading rules. By extension, I analyze the specific case of activist campaigns as inside information and argue that it would be consistent with the property rights approach to allow activist investors to share their investment and trading strategies with other market participants that further their activist agenda.

Margin Loans, Insider Trading and Disclosure Obligations: A Study of the Securities Trading Policies of the ASX 100

2020 ◽  
Author(s):  
Juliette Overland
Keyword(s):  
Insider Trading ◽  
Best Practice ◽  
Listed Company ◽  
Listed Companies ◽  
Legal Issues ◽  
Law Reform ◽  
Inside Information ◽  
Practice Recommendations ◽  
Securities Trading ◽  
Disclosure Obligations

Complex legal issues arise when listed company personnel enter margin loans over company securities. Does insider trading occur on a forced sale of company securities if the borrower possesses inside information? If a material number of company securities may be subject to a forced sale, must the listed company disclose it to the market? Are company personnel obliged to inform a listed company they have a margin loan over company securities? There is significant variation in the manner in which listed companies address these issues, which include applying prohibitions, requiring approvals, and obliging notifications. This article undertakes a detailed study of the securities trading polices of the ASX 100 to analyse the ways in which listed companies treat margin loans over company securities. This article proposes law reform and the development of ‘best practice’ recommendations for the treatment of margin loans in the securities trading policies of listed companies.

scholarly journals Inside information and insider trading

2019 ◽  
Vol 29 ◽  
pp. 119-134
Author(s):  
Konrad Hnyluch Sobański
Keyword(s):  
Financial Markets ◽  
Insider Trading ◽  
Capital Market ◽  
Self Control ◽  
Inside Information ◽  
Confidential Information ◽  
Market Abuse ◽  
Market Participants ◽  
Insider Dealing ◽  
Internal Information

EU law acts often have a built-in element of the so-called self-control, consisting in verification of the effectiveness of regulation after a specified period of time from the entry into force of a legal act. In the year 2019, the Market Abuse Regulation MAR, which in 2016 introduced new regulations concerning confidential information and trade related to internal information, causing a revolution in the capital market, will be reviewed. Numerous new duties were imposed on market participants, among others in the field of transaction reporting, access to confidential information, the circle of persons having access to confidential information. Due to the above, the article discusses the regulations of confidential information and related obligations imposed on market participants, based on the current achievements of the doctrine and judicatory. These considerations have been confronted with the undesirable element of having confidential information, i.e. insider trading. Often, an entity that has access to specific confidential information uses it in an unlawful manner to achieve its own profit. This causes inequalities in access to market information and leads to distortions in the transparency of financial markets. The article also included a polemic on the morality of insider dealing. Informacja poufna w obrocie papierami wartościowymiAkty prawa unijnego często mają wbudowany element tak zwanej samokontroli self controlling, polegający na weryfikacji skuteczności regulacji po upływie określonego czasu od wejścia w życie aktu prawnego. Na rok 2019 przypada rewizja rozporządzenia MAR Market Abuse Regulation, które wprowadzając w 2016 roku nowe regulacje dotyczące informacji poufnej i obrotu związanego z informacją wewnętrzną, spowodowało rewolucję na rynku kapitałowym. Na uczestników rynku zostały nałożone nowe liczne obowiązki, między innymi w zakresie raportowania transakcji, dostępu do informacji poufnej czy też kręgu osób mających dostęp do informacji poufnej. Z uwagi na to w artykule omówione zostały regulacje informacji poufnej oraz związanych z nią obowiązków nałożonych na uczestników rynku, opierając się na aktualnym dorobku doktryny i dostępnym orzecznictwie. Rozważania zostały zestawione z niepożądanym elementem posiadania informacji poufnej, to jest insider trading. Często podmiot mający dostęp do określonych informacji poufnych wykorzystuje je w sposób bezprawny dla osiągnięcia własnego zysku. Powoduje to nierówności w dostępie do informacji rynkowych i prowadzi do zaburzenia transparentności rynków finansowych. W artykule podjęto również polemikę co do moralności wykorzystywania informacji poufnych.

Insider trading in the European Union and in Brazil: a comparison of the essential elements of its definition

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Anna Blachnio-Parzych ◽  
Alexander de Castro
Keyword(s):  
European Union ◽  
Insider Trading ◽  
Design Methodology ◽  
Essential Elements ◽  
The European Union ◽  
Inside Information ◽  
Content Type ◽  
The Subject ◽  
Definition Of ◽  
The Eu

Purpose The purpose of this study is a comparison of anti-insider trading regulations in the European Union (EU) and in Brazil. Design/methodology/approach The subject of the comparison are three key elements that define the shape of the protection against insider trading, namely, the definition of inside information, the definition of insiders and the kinds of behaviours that are forbidden. Findings There are both differences and similarities between EU and Brazilian legislations on insider trading. The main discrepancies found in the three foci of the analysis seem to relate strongly to the different rationales for the prohibition of insider trading adopted in the two legal systems. In the EU, market egalitarianism and thus the parity of information, are the central concepts, whereas fiduciary duties originally constituted the point of reference in Brazil, although it has been losing importance over time owing to subsequent changes in the legislation. In sum, while anti-insider trading regulations in the EU have a well-defined identity, in Brazil their policy basis seems to be in the process of redefinition. Originality/value As of the time of submission of this study no published academic works dedicated substantially to a comparison of the anti-insider trading legislation of the EU and Brazil could be found.

Rights in Data and Information

2017 ◽  
Author(s):  
Huw Beverley-Smith
Keyword(s):  
Property Rights ◽  
Common Law ◽  
Legal Protection ◽  
The European Union ◽  
Informational Privacy ◽  
Market Participants ◽  
Data Exclusivity ◽  
The Common ◽  
Theoretical Issues ◽  
Factual Data

This Chapter examines intellectual property rights in data and information in the European Union and major common law systems. It outlines the principal forms of legal protection or compilations of data and analyzes the competing doctrinal and economic bases for rights in information. The practical legal, economic, and theoretical issues in granting property rights to collections of factual data in major legal systems are examined in the context of European harmonization efforts. The chapter further examines the protection of data and information under the laws of confidentiality and trade secrets, and informational privacy under the common law and statutory data protection laws. Finally, the chapter outlines the scope of data exclusivity rights in respect of pharmaceuticals and the challenges in accommodating the conflicting interests of market participants in data driven economies.

La (des)protección de la propiedad intelectual de las obras del poder público

2017 ◽  
pp. 199-232
Author(s):  
Juan Antonio Ureña Salcedo
Keyword(s):  
Intellectual Property ◽  
Property Rights ◽  
Intellectual Property Rights ◽  
Public Information ◽  
Third Parties ◽  
Public Power

LABURPENA: Lan honen hasieran, jabetza intelektualaren arauek botere publikoaren erabilerari (izan botere legegilea, betearazlea nahiz judiziala) lotutako obrei ematen dioten babesgabetasuna aztertzen da. Babesgabetasun hori XXIi. Mendean azkenean ezarri behar den gardentasun publikoari ezin hobeto lotuta dago. Informazio publikoa eskuratzeari eta hura berrerabiltzeari buruzko lege batzuen arabera, ordea, jabetza intelektualaren eskubideak egotea muga bat izan daiteke bai hura eskuratzeko bai berrerabiltzeko. Azterlan honetan lege-irtenbide horren aurkako argudioak ematen dira. Bestalde, jabetza intelektualaren eskubideen titulartasuna lan egiten den administrazioari dagokiola defendatzen eta argudiatzen da hemen (hirugarrenen sarbide hori erraztu behar luke horrek). RESUMEN: Comienza este trabajo con un análisis sobre la desprotección por las normas de propiedad intelectual de las obras vinculadas al ejercicio del poder público (ya sea el Legislativo, el Ejecutivo o el Judicial). Esta desprotección liga perfectamente con la transparencia pública, que tiene que acabar imponiéndose en el s. XXI. Algunas leyes de acceso a la información pública y de reutilización de la misma, sin embargo, apuntan que la existencia de derechos de propiedad intelectual puede constituir un límite tanto para el acceso como para la reutilización. En este estudio se aportan argumentos en contra de esta solución legal. Aquí se sostiene y se fundamenta, además, que la titularidad de los derechos de propiedad intelectual corresponde a la Administración para la que se trabaja (lo que debería facilitar dicho acceso por terceros). ABSTRACT: This work begins with an analysis about the vulnerability provoked by the intellectual property rules regarding works linked to the exercise of public power (either the legislative, the executive or the judiciary). This vulnerability connects perfectly with public transparency, which eventually has to be imposed in the XXI century. Nevertheless, some Acts on access to public information and its re-use indicate that the existence of intellectual property rights can be a limit both for the access and re-use. This study provides arguments against this legal solution. It is argued and justified, besides, that the ownership of intellectual property rights belongs to the Administration to whom someone works (which should facilitate that access by third parties).

scholarly journals Deconstruction and Reconstruction of the “Comply or Explain” Principle in EU Capital Markets

2015 ◽  
Vol 5 (3) ◽  
pp. 233-288 ◽  
Author(s):  
Konstantinos Sergakis
Keyword(s):  
Capital Markets ◽  
Potential Role ◽  
Investment Strategies ◽  
Market Participants ◽  
Monitoring Process ◽  
Future Potential ◽  
Continued Use ◽  
Transparency And Disclosure ◽  
The Eu ◽  
Comply Or Explain

Abstract The “comply or explain” principle has already acquired significant importance in corporate law and regulations and is considered to be the preferred regulatory tool in the EU for increasing transparency and disclosure of market participants’ strategies and activities. The flexibility of the principle is perceived as the most suitable way to create indirect coordination of practices amongst market actors, as well as better mutual understanding of their different priorities. Having initially shown its considerable appeal in the area of corporate governance statements issued by corporate entities, it has now expanded its influence into other areas serving similar transparency imperatives, such as the exercise of stewardship responsibilities by institutional investors and proxy advisors. In this paper, we will focus on the merits and shortfalls of the “comply or explain” principle in all the above-mentioned areas, both at national and at EU levels, and will critically challenge its effectiveness in the current regulatory framework. Moreover, we will seek to justify its continued use by demonstrating its future potential role as a veritable dialogue spectrum between different market participants. Lastly, we will emphasise the need for a soft monitoring process from national regulators which will enable both the “comply or explain” principle and its users to participate in a holistic effort for the adoption of sound investment strategies via the fruitful exchange of views and ideas and better communication with regard to their respective role in capital markets.

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