Economics, Econometrics and Finance
4 years ago

Competition Beats Regulation: Insider Trading Rules May Harm Liquidity Traders

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RePEc: Research Papers in Economics
The Optimal Regulation of Insider Trading
Jhinyoung Shin

Paper Summary

Insider trading regulations aim to minimize losses for regular traders. By making market pros compete with insiders, regulations can be effective. Stricter rules can improve market pros' info accuracy, making some insider trading okay. Allowing more pros in and sharing info with them can also help achieve regulatory goals.

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