Much of the theory underlying the EC Directive was adopted from the United States case law. Both the Securities and Exchange Commission and the courts in the United States have been struggling since 1961 to define precisely what conduct constitutes improper trading on nonpublic information. However, as of 1992 neither Congress nor the Commission had developed a definition. The EC Directive contrasts sharply with the failed congressional effort. The Directive established a minimum uniform standard for legislation in each of the member countries. It divides persons who possess nonpublic information into two categories. Primary insiders are those who have acquired the information as a result of their employment or other direct positional access to the source of the information. Secondary insiders are those who have obtained the information from a source who was a primary insider directly or indirectly. The determination of improper trading is based on trading while in possession of the information and not on a fiduciary duty. Although the impact of the directive's affirmative disclosure mandate is unclear, its clear definitional approach is preferable to the unclear rule in the United States. It provides certainty and predictability and also addresses the liability of persons other than true insiders. To provide needed certainty and coherence, Congress should follow the EC approach and codify the law, thereby providing needed certainty and coherence. Footnotes