On Combating Unlawful Use of Insider Information

Igor Gorchakov

Baker & McKenzie

The rules prohibiting unlawful use of insider information and manipulation of the market, and aimed at protecting the interests of investors, are in the laws of practically all developed countries. In some common law countries, for example the USA, similar laws exist in the form of judicial precedents. In other countries, similar rules are set forth as a part of special laws. In particular, such special laws were passed in Australia, Canada, Mexico, Indonesia, South Africa, Thailand and other countries. In the European Union this matter is regulated by several special directives of the EU, the provisions of which are detailed in the national laws of EU member states.

The draft federal law “On Combating Unlawful Use of Insider Information,” passed by the Federation Council, fills in serious gaps in the legal regulation of this issue currently existing in Russian legislation. Such regulation of the use of information that is not in the public domain, capable of influencing the price of this or that financial instrument, is represented in Russian legislation by several standards of the Federal Law "On the Securities Market," operating according to the concept of "inside information": a term with a broader content, which relates to more than just the financial market.

This draft law was worked out taking into account contemporary mod