Abu Dhabi: A new ban on insider trading has officially taken effect on the Abu Dhabi Securities Exchange (ADX). This regulatory measure is aimed at curbing illegal trading practices and enhancing market integrity.
The ban, which comes as part of broader efforts to improve transparency and fairness in financial markets, prohibits individuals with access to non-public, material information from trading in ADX-listed securities. This includes executives, employees, and other stakeholders who may possess confidential information that could influence stock prices.
The ADX announced that the decision to enforce the insider trading ban is based on Article No. (14) of the Securities and Commodities Authority (SCA) Board of Directors’ Decision No. (2/R) of 2001, which outlines regulations for trading, clearing, settlement, transfer of ownership, and custody of securities. The resolution will be distributed to the SCA, all listed companies, ADX departments, accredited brokers, and ADX investors.
Financial analysts and market experts anticipate that this ban will contribute to a more transparent trading environment and reduce the risk of market manipulation. The ADX has also launched educational programs to inform market participants about the new rules and their implications.
What is Article 14?
Article No. (14) of the Securities and Commodities Authority (SCA) Board of Directors’ Decision No. (2/R) of 2001 addresses regulations related to trading practices, including prohibitions on insider trading. This article outlines the rules governing the use of non-public, material information by individuals involved in trading securities. It sets forth the legal framework for preventing market manipulation and ensuring fair trading practices, thereby protecting the integrity of financial markets.