The statutory prohibition of insidert trading in Namibia : lessons from South Africa

Abstract

Insider trading is defined as a practice by which an individual that have price or value-sensitive non-public confidential information, concludes a transaction in securities to which that information relates, without sharing that information with others. Insider trading is often treated as an illegal conduct. However, insider trading is only illegal if it was unlawfully done for one's own gain or to avoid a loss by a person who had non-public price-sensitive information that relates to the affected securities. It is submitted that insider trading decreases or hampers confidence in the financial markets. Therefore, insider trading should be effectively regulated to promote international competitiveness in any country. Insider trading practices have affected the proper functioning of financial markets in several jurisdictions, including Namibia and South Africa. Consequently, this research usefully reveals that the Namibian insider trading regulatory framework is still characterised by numerous flaws and shortcomings that have negatively affected the combating of insider trading in Namibia. Accordingly, this research examines and investigates the adequacy of the Namibian insider trading laws in order to recommend possible measures that could be employed to promote an effective and adequate insider trading statutory regulatory framework in Namibia. The researcher hopes that this research will promote the efficiency and stability of the Namibian financial markets by the effective curbing of insider trading.