Evaluation of the Legal Framework for Corporate Insider Trading in Tanzania’s Securities Market

Abstract

This paper examines Tanzania’s legal and regulatory framework governing insider trading using a doctrinal legal methodology. It critically analyzes key legislation, including the Capital Markets and Securities Act, and evaluates enforcement mechanisms and institutional capacity against international benchmarks such as the IOSCO Principles. The study finds significant shortcomings in legal definitions, investigative powers, and punitive measures, as well as deficiencies in regulatory resources and enforcement capacity. These gaps hinder the effective deterrence of insider trading. Enforcement is further constrained by limited technical expertise, inadequate surveillance infrastructure, and low public awareness. Drawing on comparative insights from jurisdictions with more mature regulatory regimes, such as the U.S. and EU, the paper highlights best practices such as specialized enforcement units, whistleblower protections, and advanced market monitoring technologies that Tanzania could adapt to its context. It recommends legislative reforms to clarify offenses and penalties, capacity-building initiatives for regulatory institutions, enhanced cross-border cooperation, and expanded investor education. The findings underscore the need for an integrated approach combining a robust legal framework, effective enforcement, and increased market transparency to foster a fair, trustworthy, and sustainable securities market in Tanzania.