A framework for combating insider trading on developing stock exchanges: Evidence from the Zimbabwean stock exchange
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Date
2013
Journal Title
Journal ISSN
Volume Title
Publisher
Academic Journals
Abstract
Stock exchanges play a vital role in any capitalist economy as they provide a secondary market where
investors can buy and sell shares under orderly conditions at fair and competitive prices. This role
requires stock exchange operations to be regulated in order to enhance the efficiency, transparency
and full disclosure in their operations. This is particularly true with respect to the potential harm
associated with insider trading. In Zimbabwe the trading of shares is conducted through Zimbabwe
Stock Exchange and is regulated by the Zimbabwe Securities Commission. The Zimbabwean Stock
Exchange is a typical emerging stock exchange whose performance has been noteworthy in the past
two decades in terms of returns on investment in United States dollar terms and in terms of share price
increases. In recent years however, the Zimbabwe Stock Exchange has faced some challenges
associated with insider trading. On the other hand principles of corporate governance, business ethics
and morality have been emphasized as critical managerial attributes that result in fair trading and
business practices. Based on literature review on the subject and responses to qualitative interviews
with stakeholder groups on insider trading in Zimbabwe, this paper discussed the concept of insider
trading and its causes and proposes a framework for combating insider trading in developing stock
exchanges.
Description
Keywords
Insider trading, Developing stock exchanges, Combatting insider trading
Citation
Saungweme, P.W. et al. (2013). A framework for combating insider trading on developing stock exchanges: Evidence from the Zimbabwean stock exchange. African Journal of Business Management, 7(17): 1630 - 1639.