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A Sterling Example of Stock Market Diligence
26 July 2007 - Features - EditorNothing can quite match the ire of stock market circles as the disgraceful phenomenon of insider trading. Employees and strategic members of supply chains always enjoy information differentials over other categories of stake holders, and no market can be expected to take abuse on this front lying down.
The frightening regularities with which the stock market environment of the first world suffers from adverse incidents of insider trading surface, tough prosecutions by regulators notwithstanding, keeps investors like proverbial cats on a hot tin roof! So what happens in exotic stock market conditions?
Fortunately, Johannesburg has taken every reasonable step to protect its stock market from insider trading irregularities. The Exchange authorities have recognized transparency and governance as highways to attracting global investments, and the stock market is diligent to a fault in terms of protecting the genuine concerns of all stake holders. It would not be an exaggeration to state that South Africa has almost gone overboard in providing legal safeguards against common stock market malpractices.
The early days of stock market history in South Africa were strewn with legal hurdles in the path to transparent and fair financial transactions. Proving guilt beyond all reasonable doubt was next to impossible, so people with access to privileged information had advantages not shared with the general investing public.
Fortunately, this kind of abuse is now a relic of the distant past. The Insider Trading Act took effect at the close of the last century. Civil litigation is now possible on the basis of probabilities, so it is up to people with access to restricted information to establish their innocence in terms of stock market accountabilities. The interests of global investors have been put front and center of individual rights.
South Africa is not the right place if you have funds from sources which you would rather hide, but it has emerged at the vanguard of new financial centers for professionally run institutions, and individuals of established means. You can be sure of a level playing field when you enter the stock market ring in South Africa, and only your investing skills and legitimate knowledge limit the potentials for earnings and appreciation!
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