Business

New guide helps firms prevent insider trading

Efforts to counter the scourge of insider trading have gone up a gear with the release of a guide outlining ways it can be prevented.

The guide details how companies and their advisers can retain control over the flow of confidential information, appropriately restrict staff dealing in the firm's securities and create a culture of compliance, the Singapore Exchange (SGX) said yesterday. It also suggests arrangements that can be put in place to more effectively deter insider trading.

These include ways to ensure that certain information remains confidential until it is reasonably expected to be disclosed under the relevant laws, and ways to minimise risks of accidental leakage of this sort of data.

There are suggestions as well on how to promote strong awareness of the importance of appropriate handling and control of market-sensitive information. There are also examples on how to implement the recommended principles and guidelines.

COMPILED

The guide was compiled by the SGX with the Association of Banks in Singapore, Institute of Singapore Chartered Accountants, Law Society of Singapore and Singapore Institute of Directors.

The SGX said it is not meant to be prescriptive or exhaustive, and needs to be customised to each company's unique profile and circumstances.

Mr Tan Boon Gin, the chief executive of Singapore Exchange Regulation, said: "Insider trading is hard to detect and prosecute as the leakage of inside information occurs covertly in private, off the exchange; the pre-emptive approach is we believe, the best way to deal with this risk.

"We look forward to more collaborative efforts with the whole ecosystem to take the fight against market misconduct further upstream."

Various stakeholders have also welcomed the move.

BUSINESS & FINANCE