Kunal Sharma, O.P. Jindal Global University
ABSTRACT
As a means of conflicting and reconciling interests and rights of its citizens, a wide variety of behavioral rules are established by every country. To govern individual social interaction rules are designated. The absence of information symmetry and failure to establish conditions for a perfect competition gives an upper hand to some participants through utilizing regulatory inadequacy to avail the unfair advantage of investors. With the aim to assure that no individual in a market gains an advantage by trading on ‘unpublished’ information or ‘insider’, insider trading regulations and laws are designed. The foundations of such laws lie to form a level playing field whose essence is to allow all participants to access the information equally. Decreasing the cost of equity and increasing market liquidity are some factors which the enforcement of insider trading laws results in.1 Based on the foundation of efficiency and equity, insider trading laws aim to ensure access of the same set of information to all the participants and discloser of material information available to a participant to all the participants.
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