AUSTRALIA - The Government has taken more action to strengthen its markets against abusive and manipulative trading techniques, with an indepth review of practices.
Depending on the findings of the investigation, the relevant laws may be changed to prohibit the practices.
Senator Nick Sherry, minister for superannuation and corporate law, said: "The effects of some of market practices have been seen in recent Australian market volatility.
"The impact of directors margin lending and rumourtage need to be understood and the laws changed if needed - this is about market integrity and investor confidence."
Although certain practices - such as 'blackout' trading, or the trading of director's own stock in market sensitive times, despite a company-imposed ban - are not illegal, they are frowned upon.
Research has shown there to be a significant lack of compliance with regard to rules around trading in the 'blackout' period, which Sherry branded "unacceptable" and added it made a "mockery of the rules".
Sherry added: "In light of the concerns raised, it is appropriate to review the regulatory regime governing such rumours and market manipulation, with specific focus on the spreading of false information."
The Corporations and Markets Advisory Committee investigation will also examine the effects of 'preferred partner' analysts, or the perception some analysts have access to confidential and privileged company data.
"I want to have a good look at this to ensure that no one is being systemically and unfairly advantaged, especially compared to ordinary shareholders," Sherry said.
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