Japan's proposed insider trading regulations explained

Author: Ashley Lee | Published: 12 Mar 2013

KEY TAKEAWAYS

· Proposed insider trading regulations show that Japan is serious about taking action against those who pass along insider information;

· Only those who pass along information with intent for it to be used to partake in insider trading will be subject to these rules;

· These rules introduce higher fees and criminal liability for those who either pass along insider information or benefit from it. Names of individuals involved will be released;

· But growing Japanese equity markets may disincentivise insider trading, and a new regime for rights issues might also help.

Following Japan’s insider trading scandals in 2012, market participants hope proposed insider trading regulations will bring domestic standards in line with international expectations.

Last year saw a crackdown on insider trading following the discovery of widespread violations that culminated in the Tokyo Stock Exchange fining Nomura JPY 200 million ($2.5 million). Information was...