New Zealand Financial Markets Authority issues revised guidance on insider trading where non-public information about one issuer is material to another

The New Zealand Financial Markets Authority (FMA) has published a revised educational information sheet explaining how New Zealand’s insider trading prohibitions may apply when non-public information about one listed issuer could materially affect the price of another listed issuer’s securities. The information sheet, titled “Insider Trading: where non-public information relating to a listed issuer (A) comprises material information in relation to another listed issuer (B)”, replaces the insider trading report the FMA circulated to industry in late August. It reflects feedback following industry engagement prompted by the FMA’s earlier inquiries into the trading conduct of two institutional investors, and adopts an educative approach aimed at providing clearer context and reducing unintended consequences that could deter legitimate market activity. The revised guidance includes risk mitigation strategies for investors, notes such cross-issuer scenarios would be uncommon in practice, and avoids the term “shadow insider trading” due to differing interpretations and developments in other jurisdictions.