86 THE REGULATION OF INSIDER TRADING IN AUSTRALIA: A HISTORICAL AND COMPARATIVE ANALYSIS Howard Chitimira* Lecturer, Faculty of Law, North-West University 1 INTRODUCTION Although Australia has been criticised by some commentators 1 as having arguably one of the broadest market abuse 2 prohibitions, it is widely acknowledged that Australia currently has the most progressive and developed market abuse legislation in the world. 3 Its regulatory framework prohibits insider trading activity indirectly through common law and directly through statutory insider trading provisions. 4 To this end, the article analyses the regulation of insider trading in Australia 5 in order to recommend possible regulatory measures that could be incorporated in the South African market abuse regime. 6 However, this article will * LLB LLM (UFH) LLD (NMMU). 1 Steinberg “Insider Trading, Selective Disclosure and Prompt Disclosure: A Comparative Analysis” 2001 University of Pennsylvania Journal of International Economic Law 635 668; Gevurtz “The Globalization of Insider Trading Prohibitions” 2002 Transnational Lawyer 63 67-78; Gething “Insider Trading Enforcement: Where are We Now and Where do We Go from Here?” 1998 Company and Securities Law Journal 607 607-618; Goldwasser “The Enforcement Dilemma in Australian Securities Regulation” 1999 Australian B.L.R 482 482; Tomasic & Pentony “The Prosecution of Insider Trading: Obstacles to Enforcement” 1989 Australian N.Z.J.C 65 65 & Loke “From the Fiduciary Theory to Information Abuse: The Changing Fabric of Insider Trading Law in the UK, Australia and Singapore” 2006 American Journal of Comparative Law 123 123. 2 Insider trading and market manipulation activities are outlawed under the Corporations Act 50 of 2001(Cth), hereinafter referred to as the Corporations Act, as amended by the Financial Services Reform Act 122 of 2001(Cth), hereinafter referred to as the Financial Services Reform Act. 3 Huang “The Regulation of Insider Trading in China: A Critical Review and Proposals for Reform” 2005 Australian Journal of Corporate Law 281 281-322, who argues that China and other countries that follow the United States of America (USA)’s insider trading principles should consider adopting the Australian model or principles to enhance their enforcement efforts, by combating insider trading and/or other market abuse practices practically and more consistently; Huang “The Insider Trading ‘Possession versus Use’ Debate: An International Analysis” 2005 Securities Regulation Law Journal 130 131-146; Overland “The Future of Insider Trading in Australia: What did Rene Rivkin Teach Us?” 2005 Deakin Law Review 708 713-730 & Huang “Redefining Market Manipulation in Australia: The Role of An Implied Intent Element” 2009 Company and Securities Law Journal 8 9-22 (this article is also available at http://www.clta.edu.au/professional/papers/conferences2009/HuangCLTA09.pdf (accessed 13-04-2014). 4 Ziegelaar “Insider Trading Law in Australia” in Walker & Fisse (eds) Securities Regulation in Australia and New Zealand (1994) 677-678. 5 Huang 2005 Securities Regulation Law Journal 131-146; Overland 2005 Deakin Law Review 713-730; Huang 2005 Australian Journal of Corporate Law 281-322; Ziegelaar Securities Regulation in Australia and New Zealand 677-678; Steinberg 2001 University of Pennsylvania Journal of International Economic Law 668; Gevurtz 2002 Transnational Lawyer 67-78; Gething 1998 Company and Securities Law Journal 607-618; Goldwasser 1999 Australian B.L.R 482; Tomasic & Pentony 1989 Australian N.Z.J.C 65 & Loke 2006 American Journal of Comparative Law 123. 6 See ss 78; 80; 81 & 82 of the Financial Markets Act 19 of 2012, hereinafter referred to as the Financial Markets Act; also see Chitimira A Comparative Analysis of the Enforcement of Market Abuse Provisions