ACCA Corporate and Business Law (F4) 2025 – 400 Free Practice Questions to Pass the Exam

A person qualifies as an insider in terms of insider dealing primarily because they possess unpublished price-sensitive information about a company. This type of information can significantly affect the price of the company’s securities and is typically not available to the public. Insiders are individuals who, by virtue of their position or relationship with the company, have access to information that could influence the investor's decision-making if it were made public.

The concept of insider trading is built around the idea that individuals leveraging such sensitive information for their own financial gain undermines market integrity and fairness. Thus, the possession of unpublished price-sensitive information establishes an insider status since it creates a potential conflict between their access to privileged information and the common interests of all investors in the marketplace.

In contrast, simply purchasing a company's securities, receiving financial rewards from the company, or holding shares does not inherently confer insider status without the essential element of having access to non-public, influential information.