Legislative Order No. (74) of 2004 (the Provisional Law on Securities Markets) did not explicitly define “inside information.”

Later, instructions and regulations were issued to address this concept—namely, Instruction No. (16) of 2011 concerning the trading activities of insiders in publicly listed joint-stock companies on the Iraq Stock Exchange.

Statutory definition under the 2011 instructions

Article (1) of those instructions defines inside information as:

“Information obtained by insiders which is not available to the general public and has not been disclosed, and which may affect the price of a security when disclosed.”

The key elements of inside information under this definition

This definition shows that inside information has three core characteristics:

• it is not available to the public (i.e., confidential and undisclosed),

• it is obtained by an insider by virtue of their position, and

• it is likely to affect the share price once revealed.

Material Information in the 2019 Draft Iraqi Securities Law

Terminology shift in the draft law

In the 2019 Draft Iraqi Securities Law, the term “material information” was used instead of “inside information.”

Definition of material information in the draft law

Article (1) defines material information as information that the Securities Commission considers important and influential in an investment decision or a voting decision regarding a security, and which has a significant effect on the price of that security.

The focus on materiality and impact

In other words, the draft law focuses on the materiality of the information in terms of the extent of its impact, requiring that its effect be “substantial” on the price of the security and on investors’ decisions.

Legal value and risk of exploitation

This precise description—materiality of impact—is what gives inside information its legal value; the more influential the information is, the greater the risk associated with exploiting it before it is disclosed.

Juristic (Doctrinal) Definition of Inside Information

Scholarly efforts alongside legislation

Alongside legislative definitions, legal scholars have also sought to define inside information.

The common core in doctrinal definitions

Despite differences in wording, most scholarly definitions revolve around the same concept: undisclosed information that has a material effect on the price of a security.

Examples of doctrinal definitions

One example is: “information not available to everyone which, if known, would be likely to have a material effect on the prices of securities.”
Others define it as a specific set of data not available to the public, relating to securities, the issuing company, or market conditions, on the basis of which a decision to trade those securities may be made.

Conditions emphasized by scholars

Many scholars agree that inside information must be undisclosed to the public and must have a material (tangible) impact on prices, such that publishing it would lead to a change in the price of the security—upward or downward.

Accuracy and confirmation as additional requirements

Some also add that the information must be true and precise, not merely rumors or misleading claims; it must be accurate and confirmed in order to qualify as exploitable inside information.

A comprehensive definition consistent with Iraqi legislation

A consolidated definition

In light of these definitions, a comprehensive definition consistent with Iraqi legislation can be formulated as follows: inside information is any information that has not been disclosed to the public and relates to the company issuing the securities, its shares, or the surrounding circumstances (whether economic, political, or otherwise), and which may affect the price of the security.

The agreed-upon elements

This definition highlights the elements agreed upon both doctrinally and legislatively: the confidentiality of the information and the materiality of its impact on market value.

Conclusion

In conclusion, “inside information” under Iraqi legislation revolves around one core idea: non-public information obtained by an insider by virtue of their position that may have a material impact on the price of a security. The Iraqi regulatory framework—particularly Instruction No. (16) of 2011—shows that market integrity is built on equal access to information and preventing any exploitation before official disclosure. The 2019 Draft Iraqi Securities Law reinforced this direction by emphasizing the concept of “material information” and requiring that its influence be “substantial” on both market price and investors’ decisions.

Key takeaways

• Legislative Order No. (74) of 2004 did not provide an explicit definition of inside information.

• Instruction No. (16) of 2011 introduced a clear definition linking inside information to non-public status and potential price impact upon disclosure.

• The 2019 draft law adopted the term material information, focusing on the magnitude of its effect on price and investor decision-making.

• Legal doctrine generally converges on consistent elements: confidentiality + specificity and precision + accuracy and reliability + material price impact.

• “Materiality” is often tested with a practical question: Would this information change the decision of an ordinary investor (buy/sell/hold) if they knew it?

Practical bullet points to apply

• Not every important piece of information automatically qualifies as “inside information”; it must meet the legal conditions.

• Official disclosure is the dividing line between inside information and public information.

• The greater the information’s capacity to move the price, the higher its legal sensitivity and the greater the risk of misuse before disclosure.

Take Action and Contact Us

If you represent a listed, an investor, or an insider and you need a precise legal assessment before trading, or you want to review disclosure and compliance procedures to avoid potential liability, contact:

At law firm in Iraq we can help you determine whether the information in question qualifies as inside/material information under Iraqi rules and advise on the safest legal steps to proceed.