Exchange Trading Rules, Surveillance, and Insider Trading

52 Pages Posted: 7 Jul 2012 Last revised: 29 Oct 2013

Douglas J. Cumming

York University - Schulich School of Business

Feng Zhan

John Carroll University - Boler School of Business

Michael J. Aitken

Macquarie Graduate School of Management

Multiple version iconThere are 2 versions of this paper

Date Written: October 15, 2013

Abstract

We examine the impact of stock exchange trading rules and surveillance on the frequency and severity of suspected insider trading cases in 22 stock exchanges around the world over the period January 2003 through June 2011. Using new indices for market manipulation, insider trading, and broker-agency conflict based on the specific provisions of the trading rules of each stock exchange, along with surveillance to detect non-compliance with such rules, we show that more detailed exchange trading rules and surveillance over time and across markets significantly reduce the number of cases, but increase the profits per case.

Keywords: Insider trading, Surveillance, Exchange Trading Rules, Law and Finance

JEL Classification: G12, G14, G18, K22

Suggested Citation

Cumming, Douglas J. and Zhan, Feng and Aitken, Michael J., Exchange Trading Rules, Surveillance, and Insider Trading (October 15, 2013). Available at SSRN: https://ssrn.com/abstract=2101826 or http://dx.doi.org/10.2139/ssrn.2101826

Douglas J. Cumming

York University - Schulich School of Business ( email )

4700 Keele Street
Toronto, Ontario M3J 1P3
Canada

HOME PAGE: http://booksite.elsevier.com/9780124095373/

Feng Zhan (Contact Author)

John Carroll University - Boler School of Business ( email )

University Heights, OH 44118-4581
United States

Michael J. Aitken

Macquarie Graduate School of Management ( email )

North Ryde
Sydney, New South Wales 2109
Australia

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