Inside information and securities fraud: checks before trading or sharing information

Under section 52A of the Securities Law, the test concerns information about a development or change in the company, an expected development or change, or other company information that is not public and that, if known, could cause a significant change in the relevant security's price. Not every new fact or rumour meets that definition.

The source, method of receipt and relationship to the sender matter. A screenshot or group message proves neither truth nor safety for the recipient.

Chapter H1 addresses use of inside information, including transactions or disclosure in the circumstances defined there. Section 54 separately addresses securities fraud, including inducement through a false or misleading statement and fraudulent influence on price movements.

Passing information, recommending, coordinating or participating in group activity does not receive one automatic classification. The facts and elements of each route must be examined. Restricted lists, trading windows and pre-clearance also apply according to law, organisational policy and the circumstances, not as a universal programme for every person or organisation.

Do not test suspicious information through a small trade or by forwarding it to a friend. Preserve the message, receipt time, source and actions taken, and obtain suitable advice.

Classification depends on the content, timing, people involved, route by which the information arrived and law applicable when action is considered.