SA`s insider trading regime has been a success in that it has changed the perception that insider trading on local markets is rife.
Insider Trading Directorate chairman Rob Barrow says changing this perception, among both local and international investors, was the directorate`s original goal.
The directorate, which operates under the auspices of the Financial Services Board, commissioned an independent report by economics consulting firm G:enesis to conduct a survey to gauge the impact of the Insider Trading Act five years after it took effect in 1999.
Barrow presented the report to news media yesterday.
"The results of the survey, reported in this paper, are striking," says Barrow. "The new regime has changed prevailing attitudes to insider trading, resulted in new policies and approaches among listed corporates and their advisors, and - according to most market participants - led to a sharp reduction in the perceived incidence of insider trading."
He says the directorate has completed 162 investigations, instituted civil action in 21 cases, referred six cases to criminal prosecution authorities and settled with 19 people. Settlements amounted to R47 million. Eight probes are now in progress.
Barrow says while insider trading will never be eradicated, the current insider trading regime has helped improve perceptions and also prompted many companies to implement policies related to insider trading.
The full G:enesis report is on the FSB`s Web site.
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