The Pros and Cons for Insider Trading Regulation in Zimbabwe

The debate on the regulation of insider trading has existed for several decades and it remains unresolved to date. For instance, proponents for the deregulation of insider trading argue that it should not be treated as an offence while proponents for the regulation of insider trading contend that it is an offence that could, inter alia, give rise to a host of problems such as poor market efficiency, poor market integrity and low public investor confidence in the financial markets of any country. It appears the Zimbabwean policy makers also view insider trading as an offence in the Zimbabwean financial markets. Consequently, insider trading is currently outlawed in Zimbabwe. Notably, insider trading is mainly prohibited to enhance public investor confidence, market efficiency and market integrity in the Zimbabwean financial markets. Accordingly, insider trading activities are statutorily prohihited in Zimbabwe under the Securities Act 17 of 2004 [Chapter 24:25] as amended (Securities Act). Given this background, the article investigates the merits and demerits of the insider trading regulation and deregulation debate. The authors submit that adequate insder trading laws that are consistently enforced by the relevant enforcement authorities and other key role-players could effectively combat insider trading activities in the financial markets of any country.