Study On Front Running By Insider Of The Fund Management Company And It's Legal Regulation

In recent years, the "Rat Trading" in fund management company have repeatedly occurred in our country, and has become a hazard of a malignant tumor of China's fund industry. If it is not removed, the interest of fund share holder in our country shall not be effectively protected, and the spirit of good faith of the fund industry shall be continuously eroded. Therefore, the strengthening of the regulation of Fund's "Rat Trading" is imperative. Fund's "Rat Trading" is not in itself a strict legal concept, but simply the name for a folk convention, while the concept is to conduct relevant research and legislative, judicial prerequisite, so it must be made clear. This paper proposes the concept of "front running by insider of the Fund Managed Company" to cover Fund's "Rat Trading", and make preliminary proposals of its legal regulation.This paper starts with a case of RONGTONG FUND "Rat Trading", chapterâ… analyzes the basic conditions and behavioral characteristics, examines the argument of the nature of Fund's "Rat Trading" and the concept of Front Running. And initially discussed feasibility of using "front running by insider of the Fund Managed Company" to cover fund "rat trading".Chapterâ…¡compares the difference between "front running by insider of the Fund Managed Company " and traditional "Insider Trading" and "Personal Trading", and give a brief analysis of its composition. Then on this basis, further demonstrated the feasibility of using "front running by insider of the Fund Managed Company" to cover fund "rat trading". Chapterâ…¢andâ…£respectively from the practical and legal dimensions, elaborated on Practical necessity and urgency of China's regulation of front running by insider of the Fund Managed Company. At the same time, introducing the defect and loophole of current law, in order to pave the way for the Improvement of law.Chapter V based on the analysis above, propose that we should improve the Legislative. First, change the philosophy of regulation. Second, make the conception clear. Third, consummate the Internal Control System and Information Disclosure System.