The regulation of insider trading in Zimbabwe : proposals for reform

Abstract

Insider trading can be defined as a practice by which one person who is in possession of non public price-sensitive information deals with such information in relevant listed securities for personal benefit. In Zimbabwe, insider trading is prohibited by the Securities Act 17 of 2004 [Chapter 24:25] as amended . However, since the enactment of the Act very few insider trading cases have been settled by the Securities and Exchange Commission of Zimbabwe (SECZ) or prosecuted before the courts. The challenge with the regulation of insider trading in Zimbabwe is the lack of resources experienced by the enforcement authorities. Such lack of resources negatively affects the effective enforcement of the insider trading prohibition. In addition, the penalties are not stringent enough to combat insider trading activities. This research also examines and investigates the adequacy of the relevant Zimbabwean laws in order to recommend possible measures that could be employed to promote an effective and adequate insider trading statutory regulatory framework in Zimbabwe.