The purpose of this study is to investigate the impact of
information asymmetry on the information content of insider
trading. By using signalling model, the effect of regulatory
policies which are laissez-faire, prohibition and disclose-or-
abstain in increasing information efficiency is studied. The
result that the scenario of information asymmetry will
influence the effect of the regulation. The robustness of the
theoretical analysis is supported in empirical studies by apply
stochastic dominance.