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Insider dealing is defined in section 9 of Hong Kong's Securities (Insider Dealing) Ordinance. It may occur in a number of ways, but generally the legislation is directed at prohibiting the misuse of particular information about a listed company's affairs by persons connected with that company who are in possession of that information using it (or encouraging others to use it) for the purpose of trading in the company's stock to make a profit or avoid a loss.

The Insider Dealing Tribunal was established in 1991 under the provisions contained in the Ordinance. If the Financial Secretary is of the view that insider dealing in relation to the securities of a listed corporation has (or may have) taken place, he may require the Insider Dealing Tribunal to inquire into the matter and determine:

 -   whether insider dealing in relation to the named listed corporation's securities has taken place;
 -   the identity of every insider dealer; and 
 -   the amount of any profit gained or loss avoided as a result of the insider dealing. 

The Insider Dealing Tribunal is an inquisitorial tribunal. It may consider all relevant and logically probative evidence. It is empowered to conduct further inquiries to supplement the evidence presented by the parties in order to assist it in determining whether or not the allegation of insider dealing it is concerned with has been proved.

The Insider Dealing Tribunal may order that a person found to be an insider dealer pay to the Government of the Hong Kong Special Administration Region an amount not exceeding the amount of any profit gained, or loss avoided, by him as a result of his insider dealing. 

The Insider Dealing Tribunal currently sits in two divisions. The Chairman of each (who must be a High Court Judge or a Deputy High Court Judge) is appointed by the Chief Executive on the recommendation of the Chief Justice. The Chairman sits with two members who are prominent members of Hong Kong's business and professional community. They are appointed by the Financial Secretary, who acts on the recommendation of the Chairman. Every sitting of the Tribunal must be held in public unless the Tribunal considers, in the interests of justice, that a sitting (or any part of it) should be held in private.

2005copy| Important notices Last revision date: 1 April, 2005