What Are Insider Transactions?

An introduction to insider transaction data and why it matters for investors, with an overview of disclosure regulations across the world's largest markets.

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What Are Insider Transactions?

An insider transaction occurs when a director, executive officer, or major shareholder of a publicly traded company buys or sells shares in that company. These individuals — collectively referred to as insiders — have access to non-public, material information about the company's performance, strategy, and outlook.

Because of this informational advantage, most countries require insiders to publicly disclose their transactions within a set timeframe. These disclosures are filed with a financial regulator or stock exchange and are made available to the public. The purpose is to ensure transparency and fairness in the markets: if insiders are trading, everyone should be able to see it.

InsiderLayer aggregrates these disclosures from 35 countries and maps them to a standardized format, making it easy to search, analyze, and integrate insider transaction data programmatically.

Why Insider Transactions Matter to Investors

Insider transaction data is one of the most closely watched signals in financial markets. Research has consistently shown that insider transactions can provide valuable clues about a company's future prospects.

Decoding Inside Information

Lauren Cohen, Christopher Malloy & Lukasz Pomorski, 2012
Exploiting the fact that insiders trade for a variety of reasons, we show that there is predictable, identifiable “routine” insider trading that is not informative about firms’ futures. A portfolio strategy that focuses solely on the remaining “opportunistic” traders yields value-weighted abnormal returns of 82 basis points per month, while abnormal returns associated with routine traders are essentially zero. The most informed opportunistic traders are local, nonexecutive insiders from geographically concentrated, poorly governed firms. Opportunistic traders are significantly more likely to have SEC enforcement action taken against them, and reduce trading following waves of SEC insider trading enforcement.
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Insider Trading and Voluntary Disclosures

Qiang Cheng & Kin Lo, 2006
[...] Accounting for endogeneity between disclosures and trading, we find that when managers plan to purchase shares, they increase the number of bad news forecasts to reduce the purchase price. In addition, this relation is stronger for trades initiated by chief executive officers than those initiated by other executives. Confirming this strategic behavior, we find that managers successfully time their trades around bad news forecasts, buying fewer shares beforehand and more afterwards. We do not find that managers adjust their forecasting activity when they are selling shares, consistent with higher litigation concerns associated with insider sales. Overall, our evidence suggests that insiders do exploit voluntary disclosure opportunities for personal gain, but only selectively, when litigation risk is sufficiently low.
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Insider Trading and Stock Market Returns

Bin Ke, Steven Huddart & Kathy Petroni, 2002
This paper provides evidence that insiders possess, and trade upon, knowledge of specific and economically-significant forthcoming accounting disclosures as long as two years prior to the disclosure. Stock sales by insiders increase three to nine quarters prior to a break in a string of consecutive increases in quarterly earnings. Insider stock sales are greater for growth firms, before a longer period of declining earnings, and when the earnings decline at the break is greater. Consistent with avoiding an established legal jeopardy, there is little abnormal selling in the two quarters immediately prior to the break.
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Insider Transaction Regulation by Country

Different countries have different rules about who qualifies as an insider, what must be disclosed, and how quickly disclosures must be made. Below is an overview of the regulatory frameworks in the major markets covered by InsiderLayer.

United States — SEC

Insider transactions in the US are regulated by the Securities and Exchange Commission (SEC) under Section 16 of the Securities Exchange Act of 1934. Officers, directors, and beneficial owners of more than 10% of any class of equity securities must file disclosures through the EDGAR system.

  • Forms: Form 4 (change in beneficial ownership, due within 2 business days), Form 3 (initial statement), Form 5 (annual summary).
  • Filing deadline: Form 4 must be filed by the end of the second business day following the transaction.
  • Reporting threshold: All transactions must be reported, regardless of size.
  • Short-swing profit rule: Section 16(b) requires insiders to disgorge any profit made from purchasing and selling (or selling and purchasing) the company's stock within a six-month period.
  • 10b5-1 plans: Insiders can adopt pre-arranged trading plans that provide an affirmative defense against allegations of trading on material non-public information.
  • Penalties: Civil and criminal penalties for failing to file on time or for trading on material non-public information, including fines and imprisonment.

Canada — SEDI

Insider reporting in Canada is governed by provincial securities regulators (collectively the Canadian Securities Administrators, CSA). Disclosures are filed through the System for Electronic Disclosure by Insiders (SEDI).

  • Reporting persons: Directors, officers, and beneficial owners of more than 10% of voting securities.
  • Filing deadline: Within 5 business days of the transaction (10 business days for certain initial reports).
  • Insider trading prohibition: It is illegal to trade while in possession of material non-public information. Civil liability and administrative penalties apply.
  • Early warning system: Acquisitions of 10% or more of a class of voting shares trigger additional early warning reporting requirements.
  • Reporting format: Filed electronically via SEDI and published on the Canadian Securities Administrators' disclosure portal.

European Union / EEA — MAR

Insider transaction disclosure in the EU and EEA is governed by the Market Abuse Regulation (MAR), which applies uniformly across all member states. National regulators (e.g. BaFin in Germany, AMF in France, CONSOB in Italy) oversee compliance.

  • Reporting persons: Persons discharging managerial responsibilities (PDMRs) and persons closely associated with them.
  • Filing deadline: Within 3 business days of the transaction.
  • Reporting threshold: Transactions exceeding €5,000 (or equivalent) in a calendar year must be reported. Individual member states may set lower thresholds.
  • Disclosure channel: Notifications are made to the national competent authority and the issuer, which then publishes them.
  • Trading windows: Issuers must establish closed periods (typically 30 days before interim or annual results) during which PDMRs may not trade without specific authorization.
  • Scope: Covers all financial instruments traded on regulated markets, including shares, bonds, derivatives, and certain alternative trading venues.

Switzerland — SIX Exchange Regulation

Switzerland, while not an EU member, has its own insider disclosure regime administered by SIX Exchange Regulation under the Swiss Financial Market Infrastructure Act (FMIA) and the Listing Rules of SIX Swiss Exchange.

  • Reporting persons: Members of the board of directors, executive management, and persons closely associated with them.
  • Filing deadline: Within 3 trading days of the transaction.
  • Reporting threshold: Transactions exceeding CHF 5,000 in a calendar year must be reported.
  • Publication: Transactions are published by SIX Exchange Regulation and by the issuer on its website.
  • Compliance: Violations can result in fines and sanctions by SIX Exchange Regulation and, in severe cases, criminal prosecution.

India — SEBI / Stock Exchanges

Insider trading in India is regulated by the Securities and Exchange Board of India (SEBI) under the SEBI (Prohibition of Insider Trading) Regulations, 2015. Disclosures are made through the stock exchanges (primarily NSE and BSE).

  • Reporting persons: Promoters, directors, key managerial personnel (KMP), and designated persons identified by the company.
  • Initial disclosure: Promoters and KMP must disclose their holdings within 30 days of becoming an insider.
  • Ongoing disclosure: Any change in holdings exceeding ’1 million in value, or 25,000 shares (or 1% of total share capital), must be reported within 2 trading days.
  • Trading window: Companies must maintain a trading window that is closed during sensitive periods (e.g. before financial results).
  • Code of conduct: Every listed company must have an internal code of conduct for prevention of insider trading.
  • Penalties: SEBI can impose fines, disgorge profits, and recommend criminal prosecution. Insider trading is a criminal offense punishable by imprisonment.

China — CSRC / Stock Exchanges

Insider transaction disclosure in China is governed by the China Securities Regulatory Commission (CSRC) and the rules of the three major stock exchanges: Shanghai (SSE), Shenzhen (SZSE), and Beijing (BSE). Hong Kong operates under a separate regime via the Hong Kong Stock Exchange (HKEX) and the Securities and Futures Commission (SFC).

  • Reporting persons: Directors, supervisors, senior management, and shareholders holding more than 5% of the company's shares.
  • Filing deadline: Changes in shareholdings must be reported within 2 trading days of the transaction.
  • Trading restrictions: Insiders cannot trade during the 30 days before periodic reports (annual and semi-annual) and 10 days before quarterly reports.
  • Short-swing profit rule: Profits from trades within a six-month period must be disgorged to the company (similar to Section 16(b) in the US).
  • Hong Kong: Under the SFO (Securities and Futures Ordinance), directors and CEO must disclose interests within 3 business days, with a threshold of HK$1 million in change of holdings.

South Korea — FSS / OpenDART

South Korea's insider disclosure regime is administered by the Financial Supervisory Service (FSS) under the Financial Investment Services and Capital Markets Act. Filings are submitted through the OpenDART (Data Analysis, Retrieval and Transfer) system.

  • Reporting persons: Major shareholders (holding 10% or more), officers (registered directors, auditors), and their relatives.
  • Ongoing disclosure: Changes in shareholdings of officers are reported monthly.
  • Major shareholder reporting: Changes in holdings of major shareholders must be reported within 5 days of the change.
  • Short-swing profit: Similar to the US and China, short-swing profits must be returned to the company.
  • Disclosure format: Filed via the OpenDART electronic system and publicly accessible through the DART website.
  • Penalties: Fines, disgorgement of profits, and criminal prosecution for insider trading violations.

Japan — FSA / TSE

Insider trading in Japan is regulated by the Financial Services Agency (FSA) under the Financial Instruments and Exchange Act (FIEA). The Tokyo Stock Exchange (TSE) and other Japanese exchanges facilitate disclosure through the TJMS (Timely Disclosure Network).

  • Reporting persons: Directors, executive officers, auditors, and major shareholders (holding 5% or more of voting rights).
  • Filing deadline: Changes in shareholdings must be reported within 5 business days of the transaction.
  • Large holdings report: Holders of 5% or more must file a Large Holdings Report within 5 business days of crossing the threshold, with changes reported thereafter.
  • Insider trading prohibition: Trading on material non-public information is strictly prohibited and carries criminal penalties including imprisonment and fines.
  • Disclosure format: Reports are filed electronically through the FSA's EDINET (Electronic Disclosure for Investors' NETwork) system.
  • Recent reforms: Japan has strengthened enforcement in recent years, with increased penalties and more active surveillance by the Securities and Exchange Surveillance Commission (SESC).

Frequently Asked Questions

Are insider transactions the same as insider trading?

Not exactly. Insider transactions are legal trades made by insiders that are reported to regulators. Insider trading typically refers to illegal trading based on material, non-public information. Most insider transactions are perfectly legal — the key requirement is that they are publicly disclosed. Illegal insider trading occurs when an insider (or a person who receives a tip from an insider) trades while in possession of material information that has not yet been released to the public.

How does InsiderLayer source its data?

InsiderLayer collects data directly from regulatory filings and exchange disclosures in each country. Each transaction record includes a link to the original filing so you can verify it. See our Data Sources page for details on each source.

Can I use insider transaction data for investment decisions?

Many investors and quantitative funds use insider transaction data as part of their research process. However, insider transactions should not be the sole basis for an investment decision. Be aware that the data provided by InsiderLayer is not intended as financial advice.

How quickly are new transactions available?

Our system checks for new filings every few minutes. The Basic plan provides data with a 7-day lag, while higher tiers provide realtime access. Data freshness ultimately depends on how quickly each regulator publishes filings — most publish within 1-5 business days of receipt.