International Securities Markets: Insider Trading Law in China
Published: September 2006
Publisher: Kluwer Law International
Country of Publication: Th Netherlands
If China is to fulfill its promise as the world's fastest-growing economy, the development of a reliable Chinese securities market is essential. The scourge of insider trading, however - commonly thought to be enormously prevalent in China - poses a major obstacle to such development. The situation is not seriously challenged by China's insider trading regulatory scheme, which leaves much to be desired in the way of deterrence and enforcement.
This book offers the first detailed analysis of China's insider trading law, explaining what constitutes insider trading in China and what the consequences of unlawful insider trading might be there. More importantly, it suggests ways in which the law might more effectively prevent the occurrence of insider trading in the first place.
Among the elements of the legal framework addressed by the author are the following:-
- rationales for prohibiting insider trading; who are insiders;
- what is inside information;
- subjective elements of insiders;
- liability for insider trading;
- persons entitled to compensation;
- prohibition on short swing profits;
- and, preventive measures against insider trading.
The author's approach focuses on China's readiness to adopt foreign ideas without adequately assimilating them into the local context. In this connection, he sets out valuable reform proposals, using authority from field interviews with Chinese stakeholders as well as from comparative case law. As an in-depth discussion of the relevant political, legal, economic and social context in which Chinese insider trading law operates, this highly informative and useful book will serve as a sterling legal guide to China's securities market in general.