Staff Reporter, Dhaka
A recent study finds that the rules preventing insider trading in Bangladesh are not adequate. Companies are not taking sufficient measures to prohibit insiders to make a profit or avoid loss at the cost of general investors.
The recently published study conducted by Professor Md. Zahir Uddin Arif from Jagannath University and Abul Fazal Wazir Ahmad ,Assistant Professor, School of Business, University of Liberal Arts Bangladesh (ULAB) find this out.
According to the study entitled “Insider Trading Recognition among the Stakeholders of Bangladesh and Adequacy of the Regulations”, although a significant proportion of the respondents are aware of insider trading, they feel their knowledge about insider trading is not adequate to detect or prevent it from happening through an employee (insider) code of conduct.
Also, the respondents think that the rules preventing insider trading in Bangladesh are not adequate. According to their opinion companies are not taking sufficient measures to prohibit insiders to make a profit or avoid loss at the cost of general investors.
The findings of this study will be useful for managers and financial regulatory bodies in understanding the need to identify and stop insiders from making abnormal profits that violate market mechanisms and regulatory control; to ensure that key employees have a better fiduciary responsibility towards general investors; and to raise awareness of insider trading in the context of an insufficient legal and regulatory system.
According to the new study, the present study will originate the value for a better and balanced stock market development in Bangladesh like many other countries and managers and financial regulatory bodies will be able to ensure improved fiduciary responsibility of the key employees towards the general investors. An important barrier to the development of an efficient market can be removed by raising awareness that insider trading occurs in the context of an inadequate legal and regulatory framework.
It’s peer-reviewed and published in CrossRef DOI Indexed journal- IJFES. The full research paper could be read following the below link:https://www.worldleadershipacademy.live/WLAJournals/List/index.php/IJFES/article/view/168