Definition
Insider trading is defined as a malpractice wherein company’s securities trade undertaken by people who by virtue of their work have access that is disclosed as non-public information that can be crucial for making investment decisions.
Insider Trading
Insider trading is the trading of a public company's stock or other securities (such as bonds or stock options) by individuals with access to non-public information about the company. In various countries, trading based on insider information is illegal.
Description
When insiders, e.g. key employees or executives who have access to the company’s strategic information, use the same for trading in the company's stocks or securities, it is called insider trading and is highly discouraged by Indonesia Stock Exchange to promote fair trading in the market for the common investor benefits.
Insider trading is an unfair practice, wherein the other stockholders are at a great disadvantage due to lack of important insider non-public information. However, in certain cases if the information has been made public, in a way that all concerned investors have access to it, that will not be a case of illegal insider trading. Illegal insider trading refers generally to buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, while in possession of material, nonpublic information about the security. Insider trading violations may also include "tipping" such information, securities trading by the person "tipped," and securities trading by those who misappropriate such information.
Prevention of Insider Transactions
The policy to prevent the occurrence of insider trading is in the code of conduct that regulates also the acquisition of information through legitimate means and uses it in accordance with applicable business ethics principles. The Company is committed to growing its sustainable operations based on existing business standards so that the Company can contribute optimally to Shareholders.