On The Legal Supervision And Management Of Insider Trading In China

Insider trading is one of the most serious illegal acts in the securities market. As an American writer describes in one of his works that focuses on inside trading, it happens almost every day, every hour and every minute. Sometimes it even doesn't take a break on Sunday. This kind of frauds may be as old as the securities market itself.In terms of western economics, all dark points of the securities market originate from market failure. And according to the principle of economic law, market failure is the very premise of government invention. Since information failure can't be avoided in the securities market, it will definitely result in the varieties of securities frauds like insider trading. As a result, the government supervision and management is to happen definitely. However, the risk of government failure exists as well. -Therefore, government supervision and management must go in accordance with the principle of legal and appropriate supervision and management. As an important part of the securities market legal system, the legal supervision and management against insider trading should pay equal attention to both insider trading behavior and governmental invention.This is even important in China, because China's securities market is government-oriented, the government has played a leading role in the process of the development of the securities market. The government role has two sides. On the one hand, it made China's securities market develop at a very rapid speed. On the other hand, it made China's stock market become so-called "state-owned stock market". Just because of the government role, China's stock market has been defined as a tool for the reform of state-owned companies, and thus other important functions has been weakened to a very serious extent. And because of the government role, with the government appearing with the double identities of both "Judge" and "Player", the supervision and management of the government has been far from satisfied, and the government credit has been suffering. Another fundamental reason for the failure of China's securities supervision and management is the China's traditional social rules and the so-called the network of "guanxi". In the traditional society, peoplelack collective sense and self-ceniered. The network of "guanxi" is a hotbed for insider trading.Of course, there are other causes for the failure of the supervision and management in China, but in my eyes, the two stated above are utmost. With this in ? mind, I offer my suggestions on the essential methods to the problem as follows: first, practice the securities supervision and management in a market-oriented way;second, perfect the legal duty system of insider trading;third, initiate the socialized supervision and management mechanism.