The efficacy of legislation and institutions aimed at regulating insider trading in South Africa

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University of the Witwatersrand, Johannesburg
Insider trading should be regulated and prohibited to ensure the effective operation of securities market. South Africa has witnessed several amendments of law intended to strengthen the insider dealing prohibitions, however these changes have resulted in few civil settlements, low administrative sanctions and insignificant criminal convictions. The main research objectives of this study are to investigate the efficacy of the legislation, institutions and strategies aimed at regulating insider trading in South Africa. The study used the textual analysis method and the desktop research approach, whilst drawing on the unified misappropriation theory. The findings of the study indicates that both the legislative shortcomings and the proposed solutions pointed to the importance of ensuring that offences are easier to prove and the need of the ability of the authourities to discern the nature of insider trading contraventions. The research also argues for contemporary, prudent, business and ethically informed alternative insider trading enforcement strategies. The argumentation for a pragmatic position for the enforcement of insider trading revealed the importance of the three-pronged utilisation of insider trading remedies, with the urgent need to enhance successful criminal prosecutions. Strengthening criminal sanctioning methods would help set national legal precedence and enhance the deterrence of insider trading offences. Whilst insider trading establishments’ challenges entail staffing, apparatus, operational and structural restrictions, the proposed strategies to these limitations strengthens the institutional capacity of establishments that enforce insider trading sanctions in South Africa. The envisaged legislative, institutional and enforcement solutions would enhance the potential for successful criminal convictions, strengthen insider trading legislation and help maintain the integrity and stability of local financial markets. Overally, the study’s challenges and the suggested solutions shows that the current legislative, institutional and enforcement limitations hinders-, whilst the envisaged resolutions improves the efficacy of the legislation and institutions aimed at regulating insider trading
A dissertation submitted to the Faculty of Commerce, Law and Management, University of the Witwatersrand, in complete fulfillment of the requirements for the degree of Masters of Law in corporate Finance and Investment, University of the Witwatersrand, Johannesburg, 2023
Insider trading legislation, Institution regulating insider trading, South Africa, Insider trading, UCTD
Kgagudi, Moruthanyane Vincent. (2023). The efficacy of legislation and institutions aimed at regulating insider trading in South Africa [Master’s dissertation, University of the Witwatersrand, Johannesburg]. WireDSpace.