ASX implement rules to ensure fair and transparent markets,...

ASX implement rules to ensure fair and transparent markets, prevent insider trading, and maintain investor confidence.

These rules are designed to prevent company directors and other insiders from trading based on non-public, material, price-sensitive information, also known as inside information.
Directors, officers, and other key insiders of a company are privy to sensitive information that could significantly impact the company's stock price if it were made public. Trading on this inside information would give them an unfair advantage over other investors and could harm the integrity of the market.

The following measures are typically in place:

Quiet Periods: Companies often establish "quiet periods" before releasing financial results or other significant announcements. During these periods, company insiders, including directors, are restricted from trading in the company's securities.

Blackout Periods: Similar to quiet periods, blackout periods restrict insider trading during specific windows of time, typically before significant announcements or events. This prevents insiders from trading on non-public information.

Disclosure of Trades: In many jurisdictions, company directors and other insiders are required to publicly disclose their trades within a certain time-frame, even if those trades were made after the information became public. This enhances transparency and allows investors to monitor insider activity.

Wall-crossing: If an insider needs to trade during a quiet or blackout period due to genuine reasons (such as diversification of investment portfolio), they may be allowed to do so through a controlled process known as "wall-crossing." This involves receiving permission from legal and compliance teams and possibly even placing restrictions on the timing and quantity of trades.

Insider Trading Policies: Companies often have comprehensive insider trading policies in place that outline the rules and restrictions regarding trading by insiders. These policies educate employees and insiders about their responsibilities and the potential consequences of violating insider trading laws.

Reporting and Enforcement: ASX have mechanisms to monitor and enforce insider trading regulations. Individuals found guilty of insider trading can face substantial fines, criminal charges, and damage to their reputation.