Three signs must be present simultaneously: the information is specific, not yet publicly disclosed, and its disclosure could materially move quotations. Rumors and general discussions don't qualify, but a prepared decision on a major transaction, dividends, or unreleased results does.
Using such information for transactions and sharing it with third parties are prohibited. The rationale for the ban isn't moral—it's market functionality: if some participants systematically trade with an advantage, others demand higher risk premiums or exit, raising the cost of capital for all issuers.
The circle of insiders is broader than commonly thought: besides management and major shareholders, it includes auditors, consultants, staff of issue organizers, and others with access to information through their work.
The flip side of the ban is the obligation of timely disclosure. Issuers must publish material facts, which is why corporate news appears on official disclosure platforms before the press. For retail investors, this indicates where to find primary sources.