What is inside information?

According to EU MAR Article 7, inside information is information that fulfills all of the following criteria:

- Is of a precise nature;

- Has not been made public;

- Relates, directly or indirectly, to at least one financial instrument;

- If it was made public, it would likely have a significant effect on the prices of that financial instrument and/or on the price of a related derivative;

The above-mentioned is the classic and most well-known definition of inside information. Acting on this type of information is called insider dealing.

However, there is another form of inside information: information conveyed by a client to his/her broker/dealer in relation to a trading order (which when entered [or eventually modified or cancelled] can significantly affect the price of a financial instrument). Acting on this type of inside information is a specific form of insider dealing that is called front running.