Insider Trading Civil Compensation System Build

Insider Trading is one cancer of the Securities Market, which is prohibited by various countries. Foreign countries depend on administrative, civil and criminal responsibility to regulate Insider Trading, however, China neglects the importance of civil responsibility in regulating Insider Trading, which cannot be replaced by punishment imposed by public laws, because public laws, which can't effectively change the unbalanced interest between inside traders and investors, only aim to protect public order. The neglect and disrespect of the investors' interest is against the rule of justice and impartiality advocated by law. But the protection of the investor's interest is the soul of Civil Damage System concerning Insider Trading (CDSIT), which has not been established in China. The securities market without perfect legal system will impair the investors' interest. Therefore the establishment of CDSIT is impending.This thesis is to put forward advices on how to establish CDSIT based on the analysis of its absence, reason and legal value. This thesis is divided into five parts as follows:Part Ⅰintroduces China's legislation and practice on the prohibition of Insider Trading. Based on the analysis of legislation and its execution, the author points out the deflection existing in China's legislation, that is, the absence of CDSIT and the deficiency existing in the execution of law caused by this absence. In the meantime, the author analyses the reason why the absence exists from the aspect of legislation thought and technical skills.Part Ⅱ analyses the legal value of CDSIT from three aspects, that is, the protection of the investors' interests and confidence, effective control of Insider Trading, and keeping the Securities Market stable and developing.Part Ⅲ analyses the precondition of establishing CDSIT-Insider Trading. The author mainly introduces how to define Insider Trading behavior, and points out deflection in China's legislation. In this part, the author also gives specific definition of inside information, insiders and Insider Trading patterns.Part Ⅳ analyses one aspect of establishing CDSIT-substantial justice system. The author mainly analyses how to establish China's CDSIT from the aspect of substantial law. Through the analysis of the nature, components, order and amount of civil damage, the author puts forward his own opinion on how to establish substantial justice system.Part Ⅴanalyses the other aspect of establishing CDSIT-procedural justice system. The author mainly analyses how to establish China's CDSIT from the aspect of procedural law. Through the analysis of the perfection of litigation system, the eligibility of the litigants, the distribution of onus probandi and the prescription of action, the author puts forward his own opinion on how to establish procedural justice system.