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Securities Law : Assignment

   

Added on  2021-06-15

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Running head: SECURITIES LAWSecurities LawName of the StudentName of the UniversityAuthor Note
Securities Law : Assignment_1

1SECURITIES LAWInsider Trading under Australian LawIntroductionAustralian Corporations Act, 2001, part 7.10, Division 3 deals with the prohibition ofinsider trading. Insider trading is the process of trading of securities while they are in thepossession of the information. The information is mostly available easily and also, if theinformation were traded, it would have an adverse effect on the price of the value of the security.The information would have a material effect which will deprecate the values of the security. InAustralia, trading in securities while being in possession of price-sensitive information or non-public information is prohibited. The pre-requisite of insider trading is that the person who hasbeen alleged of insider trading needs to have inside information. The definition can be imputedin the cases of traders being persons but the question is how a company can be deemed to be aninsider trader. In cases when the company is the insider trading, the difficulty is in proving howthe company is possessing information. What constitutes possession of information and what arethe parameters. Is merely physical withholding of information important or is it important to bejust aware of all the inside trading. Under the Australian Law, it is essential to state that there arecertain deeming provisions which reinstate that the company’s directors and officers imputeknowledge to the company. The instances when the Australian companies have been prosecutedfor indulging in insider trading have been very few and almost there have been no situation whena big corporation in Australia has been subject to civil penalties for dealing in insider trading.Therefore, it is important to prove that the trader is in possession of information before goingahead with the accusation of insider trading.
Securities Law : Assignment_2

2SECURITIES LAWProvisions of Insider Trading under the Australian LawSection 1043 A and section 1042A of the Corporations Act 2001 talks about insidertrading which can be defined as any person who possesses certain information which is noteasily available to the general public, to which he has access1. The trader is aware that theinformation he has is classified and it not available to the general public. The information has tobe such which has a material value, that is, a material information related to the company whichseems to be of value to a reasonable man. The information should have an effect of hamperingthe profits of the company and shall also be capable of affecting the price of certain securities.The trader has to be aware of the profitability of the information and should also be material. Thetrader ahs to be in possession of those information while he is trading. By trading, it means, thatbeing in possession of the securities, he should be able to buy or sell those securities or he willget someone else to do it for him. The question that needs to be first resolved is how a companycan fall into the definition of ‘person’ because by mere interpretation of section 1043A of theCorporations Act, it is apparent that the liability only extends to persons2. The Corporations Actdoes not specifically talk about the company being an insider trader. However, by clearinterpretation of the Acts Interpretation Act, Section 22(a), by taking into consideration of theCommonwealth Statute, it states that the persons shall also include a body politic or anycorporate, which is also inclusive of an individual3. Therefore, it can be concluded that theprovision of insider trading shall apply to both corporations as well as persons. There are someprovisions of the Corporations Act that are exclusively invested with the liability of companies,for example, section 1043F of the Corporations Act. Section 1043F talks about the exceptions1CORPORATIONS ACT 2001 No. 50, 2001 - SECT 1013Liability For Insider Trading (2018) Www5.austlii.edu.au<http://www5.austlii.edu.au/au/legis/cth/num_act/ca2001172/s1013.html>2Australian Corporations Act, 2001.3Acts Interpretation Act, 1901.
Securities Law : Assignment_3

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