Insider trading in the European Union and in Brazil: a comparison of the essential elements of its definition

Abstract

Purpose The purpose of this study is a comparison of anti-insider trading regulations in the European Union (EU) and in Brazil. Design/methodology/approach The subject of the comparison are three key elements that define the shape of the protection against insider trading, namely, the definition of inside information, the definition of insiders and the kinds of behaviours that are forbidden. Findings There are both differences and similarities between EU and Brazilian legislations on insider trading. The main discrepancies found in the three foci of the analysis seem to relate strongly to the different rationales for the prohibition of insider trading adopted in the two legal systems. In the EU, market egalitarianism and thus the parity of information, are the central concepts, whereas fiduciary duties originally constituted the point of reference in Brazil, although it has been losing importance over time owing to subsequent changes in the legislation. In sum, while anti-insider trading regulations in the EU have a well-defined identity, in Brazil their policy basis seems to be in the process of redefinition. Originality/value As of the time of submission of this study no published academic works dedicated substantially to a comparison of the anti-insider trading legislation of the EU and Brazil could be found.

Comparative study of disgorgement and disgorgement fund regulations in Indonesia, the USA and the UK

“…Market fraud, financial reporting integrity issues and mis selling are seen as some of the most significant ethical issues facing global financial markets (Cumming et al , 2015). Insider trading continues to be a central issue for the protection of securities markets from abuse by privileged market participants (Blachnio-Parzych and de Castro, 2021). Insider trading is a violation in the capital market which is seen as one of the main threats to the functioning of the capital market, by definition, insider trading is a way of obtaining information on shares or issuers that do not depend on how the agent is.…”

“…Insider trading is a violation in the capital market which is seen as one of the main threats to the functioning of the capital market, by definition, insider trading is a way of obtaining information on shares or issuers that do not depend on how the agent is. (Blachnio-Parzych and de Castro, 2021). Usually, market participants want to maximize their profits, package their products as securities and sell them to investors with zero or very little knowledge of the associated risks.…”