Which of the following is true about the role of an insider?

Insiders have specific regulations they must adhere to when trading their company's securities due to the sensitive information they possess. Insiders typically include executives, directors, and employees who have access to non-public information that could affect the company’s stock price. Because of this privileged access, the law imposes restrictions to prevent insider trading, which occurs when an insider buys or sells stock based on material non-public information.

Regulations often require insiders to report their trades to ensure transparency in the market. This is intended to maintain fair trading practices and protect investors from unfair advantages that insiders might exploit. Consequently, insiders cannot simply trade freely without oversight and must navigate various legal requirements when engaging in stock transactions.

By understanding that insiders are subject to these specific regulations, it becomes evident that the integrity of the financial markets relies on these rules to prevent abuses that could harm investors and the overall economy.