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Regulations to combat insider trading, being drafted now by the Ministry of Economic Development, will come into force later this year.
Liam Mason, general counsel of the Securities Commission which will enforce the new law, said the existing law treated insider trading mainly as a harm against a company.
"So, whether someone is an insider depends in part on that person's connection to the company," he said. "It is also why, when the commission sues someone under the current law, it can only do so by taking up the company's right of action."
However, the new law would treat insider trading primarily as harming the market and market efficiency. "The commission will have a specific enforcement role, and there will be criminal penalties as well, with potential for jail sentences."
