The definitions of ‘inside information’ and ‘insider’ in the Financial Markets Act 19 of 2012

van der Walt, Johann Nico (2019-04)

Thesis (LLD)--Stellenbosch University, 2019.

Thesis

ENGLISH ABSTRACT : The definitions of ‘insider’ and ‘inside information’ in the Financial Markets Act 19 of 2012 are, as is the case with their international counterparts, central to the Act’s regulation of insider trading. It has long been recognised, however, that those definitions, inherited from repealed companies and market abuse legislation, are cumbersome and counter-intuitive. This state of affairs obtains as the South African legislature has failed to undertake the most fundamental enquiry in formulating a coherent regulatory scheme aimed at prohibiting supposedly wrongful conduct: identifying a single theory of wrongfulness upon which to base its prohibitions. Instead, the definitions include elements of all possible regulatory bases for insider trading, including those having as their object the protection of proprietary rights in information and born out of the fiduciary doctrine. It is argued that the definitions, part of legislation aimed at addressing a financial market wrong, should be formulated with reference to the rights and obligations at play in those markets and the legislature’s objectives for those markets. A proposal is made in that regard.

AFRIKAANSE OPSOMMING : Die definisie van ‘insider’ (binnehandelaar) en ‘inside information’ (binnekennis) soos vervat in die Financial Markets Act 19 of 2012, staan, soos in ander jurisdiksies, sentraal tot die regulering van binnehandel in dié Wet. Dit word egter lank reeds erken dat daardie definisies, wat hulle ontstaan in herroepte wetgewing aangaande maatskappye en die misbruik van finansiële markte het, omslagtig en onlogies is. Die stand van sake heers aangesien die SuidAfrikaanse wetgewer nie die mees fundamentele voorafgaande ondersoek onderneem het nie: Die wetgewer het nie een teorie van onregmatigheid geïdentifiseer waarop die verbod op binnehandel baseer kon word nie. In plaas daarvan sluit die definisies elemente van alle moontlike regulatoriese basisse vir binnehandel in, ook die wat mik op die beskerming van eiendomsreg van inligting en wat hulle oorsprong in die fidusiêre beginsel het. Dit word dus aangevoer dat die definisies, as deel van `n stuk wetgewing wat daarop gemik is om die finansiële markte te reguleer, formuleer moet word met verwysing na die regte en pligte relevant tot daardie markte, sowel as die wetgewer se doelwitte met betrekking to daardie markte. `n Dienooreenkomstige voorstel word in die proefskrif gemaak.

Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/105745
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