The country's Corporations and Markets Advisory Committee (Camac) has issued a new report suggesting that civil penalties should be brought in for traders found guilty of market manipulation.
It also called for directors to be forced to disclose market loans to shareholders and said that they should be banned for trading in shares during blackout periods.
Camac convener Richard St John stated that the report aims to "reinforce good corporate practice and enhance disclosure in dealings by directors and executive officers in shares of their company", as well as "promote responsibility" among those operating in the market.
However, the Australian Institute of Company Directors argued that the current rules regarding insider trading are adequate, stating that introducing the proposals could have a "detrimental impact".
The announcement comes after the a report issued by the Australian Securities Exchange earlier this month suggested insider trading investigations are on the rise in the country.