Of Driftnets and Submarines: The Insider Trading Laws of Singapore

• Main Author: KOH, Pearlie
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2002
• Subjects: Asian Studies; Banking and Finance Law; Commercial Law
• Online Access: https://ink.library.smu.edu.sg/sol_research/671
• Institution: Singapore Management University

The Securities and Futures Act (SFA) in Singapore effectively redefines what conduct constitutes insider trading. The Securities Industry Act Cap 289 utilizes a person-connected approach, in that a person can only be guilty of and liable for insider trading if there is proof of a connection with the company either as an insider or as a tippee. In contrast, the SFA adopts an information-connected approach to liability, under which the test is shifted to the core essence of the offense, i.e. trading while in possession of undisclosed market sensitive information by the defendant, irrespective of that person's connection or lack thereof with the company. Singapore subscribes to the market fairness rationale for the prohibition of insider trading. The Singapore markets must be perceived to be fair or its economy will be adversely affected. Objection to the present scheme of insider trading regulation under the SFA is simply that it is overly encompassing.