Original scientific paper
https://doi.org/10.31141/zrpfs.2023.60.147.65
The Concept of Insider Information
Tomislav Jakšić
orcid.org/0000-0002-8798-2208
; University of Zagreb, Faculty of Law
Abstract
One can easily say that insider information represents information that gives its user an advantage
before other market participants when making an investment decision (e.g. information on the made
takeover bid for the issuer’s shares). Such an advantage is regularly reflected in the financial benefit
that the user of such information achieves by selling or buying the issuer’s financial instruments.
It should be noted that information asymmetry always exists in the capital market because at least
higher management of the issuer (insiders) have price-sensitive information. However, in order to
protect transparency and strengthen confidence in trading on the regulated capital market, any abuse
of such information is prohibited. The capital market in Croatia is no exception. However, if there
were any such cases, one could presume that they are very rare. This does not mean that such abuses
do not occur. This can probably be attributed to an insufficiently developed investment culture, and
then to insufficient regulatory knowledge and general lack of trading experience. Accordingly, the
purpose of this paper is to start from the beginning by conceptually elaborating upon the term of
“inside information” and thereby, hopefully, encouraging capital market participants to be more
careful with the use of such information.
Keywords
insider information; regulated market; trading; abuse of capital market
Hrčak ID:
296631
URI
Publication date:
28.3.2023.
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