Legal regimes to counter insider dealing and market abuse : a comparative analysis of the UK and Jordan

Abstract

The international investments in the Middle East has increased the level of stock market activity, this being the case in Jordan as well. This situation has raised issues of public interest. Precisely to what extent are some investors engaging in "insider dealing" and thereby making profits not available to others? Considering the threat of insider dealing to market integrity and investor confidence, Jordan has, like law-makers and financial regulators the world over, brought this issue under the spotlight and imposed a prohibition on insider dealing. Nevertheless, this thesis argues that Jordan’s regime is neither effective nor enforced. During the last 17 years since the prohibition regime was enacted, no cases of insider dealing have been brought before the courts. The study therefore explores and evaluates the policy for prohibiting insider dealing and market manipulation in Jordan. In particular, it examines why the prohibition was first created, and why it was not subsequently enforced. To best approach this important question, the study adopts a comparative and analytic methodology, considering both the UK and the Jordanian prohibition regimes. It would not be possible to assess the Jordanian regime fairly and appropriately unless it was viewed externally and in a larger context through the use of a comparative method. This comparative approach focusses both on the clarity of the statutory prohibition (the legal rules) in the UK and Jordan, and on the effectiveness of the enforcement (the law in action). The outcomes of this study are in the form of, on the one hand, suggestions for developing and strengthening the Jordanian prohibition regime, and on the other hand, recommendations for more effective enforcement of the UK prohibition regime.