	u s securities group backs insider restraints the securities industry association backed a variety of restraints on insider trading and hostile corporate takeovers and asked congress to define insider trading in law the industry trade association called on u s securities firms to take steps to protect sensitive corporate secrets to guard against illegal trading by employees the association also backed broad federal restrictions on a variety of tactics used in hostile corporate takeovers but it said investment banking firms should be allowed to continue to engage in both arbitrage and merger and uisition activities so long as those functions were kept separate the sia in a report adopted yesterday by its board of directors backed a higher enforcement budget for the federal securities and exchange commission and called on u s stock exchanges to beef up their supervision of member brokerages the report said securities firms should be more rigorous in restricting sensitive information on a need to know basis it said firms should train their employees to understand the need for confidentiality of market sensitive information it said legislation to define insider trading should avoid expanding current law in a way that would impede the market it said an insider trading definition should exempt a securities firm from liability for law violations by its employees unless the firm had participated in or was aware of the wrongdoing in the mergers and uisitions area the association advocated a ban on greenmail payments or poison pill takeover protection plans without prior shareholder approval it said a group or individual buying up a company s stock should be required to file a public disclosure statement before uiring more than five pct of the company s shares under current law disclosure may be made as late as ten days after exceeding the five pct limit the association said all purchases exceeding pct of a company s voting stock shouls be made only through a tender offer open to all shareholders under current law there is no limit on open market purchases the group said the federal government should preempt state regulation of defensive takeover tactics the group said all tender offers should remain open for at least calendar days the current requirement is expressed in business days it said so called lockup devices in which securities are issued to a friendly investor to seal a takeover deal or fend off an unfriendly predator should be limited to pct of the target company s total common stock association president edward o brien said the group acted out of concern over the ad hoc restructuring of corporate america on wall street and investor fears about insider trading and fairness in the marketplace reuter 
