On Insider Trading And The Lfgal Regulation

Insider trading in stock market not only seriously destroys the order of the market dealing but also has a great impact on the fluctuation of the share prices, which greatly damages the benefit of the unaware dealers, weakens investors'confidence in investment, lowers the efficiency of the stock market, distorts the ability of the share price to respond to the assets value, and damages the assets allocation efficiency in the stock market. Therefore, how to strengthen the function of the stock supervision and regulation departments and protect legal rights for investors has become an important task for the global stock supervision institutions. At present, most countries in the world have enacted laws to forbid insider trading. In 2005, Article 73 in the amended The Securities Law of People's Republic of China clearly provides that "the insiders and those who illegally obtained the insider information shall not engage in securities activities.' However, because of the low transparency in the market information, the incomplete market institutions, the poor environment to protect investors, and the ineffective supervision of anti-manipulation, etc, insider trading fails to disappear in this emerging and transitional stock market of China. In addition, due to the lack of proactive regulation and supervision, many investors pay heavy prices. Hence, how to strengthen the precaution system and effectively reduce insider trading by way of law, especially through legislation, has become an important subject for the protection of investors in Chinese stock market. Based on the actual circumstances in the stock market of China, I am studying the perfection of the legal regulation of the insider trading in domestic market.