The Merger of Fairness and Efficiency: An Analysis of its Desirability in the Context of Insider Trading Laws in Australia                                               

Presented by: Dr Afroza Begum

LLB (Hons) and LLM (Bangladesh), LLM (Western Sydney), PhD (University of Wollongong), Honourary Fellow, Faculty of Law, University of Wollongong, Australia; Professor of Law, American International University-Bangladesh; former Member of the National Parliamentary Committee, Bangladesh.

Wednesday, 29 July 2009

Abstract:

Market fairness and market efficiency, the two central competing rationales whilst still dominate the insider trading (IT) paradox in other jurisdictions especially in the USA, Australia has adopted somewhat distinctive regulatory approach which is predominantly premised on a merger of these two rationales in dealing with IT. Opposing this unity, a number of scholarly research confidently claim that fairness and efficiency goals are inherently incompatible and have damaging impacts on the effectiveness of IT regulation. Yet, empirical evidence suggests that efficiency cannot be generated in itself but rather be best achieved through the promotion of a transparent securities market that stimulates and sustains some core notions of fairness such as the equality of access to information, informed market and improved investor confidence. By concurring with the perceived spirit of the merger as entrenched in the regulatory reforms in Australia I argue that an appropriate interaction instead of separation between fairness and efficiency is not only desirable but also inevitable to advance the goal of IT laws.

For further information contact:

Dr Nadirsyah Hosen
Lecturer
Faculty of Law
University of Wollongong NSW Australia
Email: hosen@uow.edu.au
Phone: +61 2 4221 4192
Fax: +61 2 4221 3188