Edited by Stephen M. Bainbridge
The first set of statutory controls on insider trading in New Zealand were enacted in 1988 and applied (with amendments) until 2008. The 1988–2008 insider trading regime is generally regarded as having failed. The various reasons for that failure include: the lack of or limitations on regulatory enforcement powers; insufficient funding for the regulator; over-reliance on private enforcement; poor regulatory design; and weak disclosure obligations on directors and officers before 2004. Consequently, New Zealand implemented its second and current insider trading regime in February 2008. This regime followed and sought to improve upon the insider trading legislation applying in Australia. Thus, for all practical purposes, the New Zealand insider trading regime has closely resembled Australia’s since 2008. Australia and New Zealand have the most expansive insider trading regimes in the world, potentially applying to any person in possession of inside information. There is one key difference between them, however: Australia’s insider trading laws are much more aggressively enforced than are New Zealand’s, where the majority of pre-2008 regime cases have been unsuccessful or settled and no prosecutions have been launched under the post-2008 legislation. This introduction briefly describes the governmental and legal systems, the main securities markets and the principal legislation.
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