In corporate transactions involving shares of listed
companies, the ability to conduct a detailed due diligence is constrained by
laws that regulate insider trading. In a paper titled “Due Diligence in Share Acquisitions:
Navigating the Insider Trading Regime”, I seek to examine this issue in
detail. The abstract of the paper is as follows:
companies, the ability to conduct a detailed due diligence is constrained by
laws that regulate insider trading. In a paper titled “Due Diligence in Share Acquisitions:
Navigating the Insider Trading Regime”, I seek to examine this issue in
detail. The abstract of the paper is as follows:
The goal of this paper
is to unpack the underlying friction between the need to facilitate due
diligence in share acquisition transactions that could place inside information
in the acquirer’s hands, and at the same time to ensure that such information
is not misused by the acquirer to the detriment of the other shareholders, a
matter that insider trading regime regards as sacrosanct. In analysing and
seeking to resolve this tension, this paper draws upon examples from three
jurisdictions, namely the United Kingdom (UK), Singapore and India. The core
argument of this paper is that from a theoretical perspective the due diligence
objective of acquirers can be reconciled with the goals of the insider trading
regime in order to preserve the interests of the target shareholder as long as
certain restrictions are placed on the conduct of the acquirer.
is to unpack the underlying friction between the need to facilitate due
diligence in share acquisition transactions that could place inside information
in the acquirer’s hands, and at the same time to ensure that such information
is not misused by the acquirer to the detriment of the other shareholders, a
matter that insider trading regime regards as sacrosanct. In analysing and
seeking to resolve this tension, this paper draws upon examples from three
jurisdictions, namely the United Kingdom (UK), Singapore and India. The core
argument of this paper is that from a theoretical perspective the due diligence
objective of acquirers can be reconciled with the goals of the insider trading
regime in order to preserve the interests of the target shareholder as long as
certain restrictions are placed on the conduct of the acquirer.
A more general background note on insider trading regulation
in India is available here, as part
of the NSE CECG Quarterly Briefing series.
in India is available here, as part
of the NSE CECG Quarterly Briefing series.