Study Of Insider Trading And Its Legal Regulation

As a defect in the wake of securities market, insider trading calls for studies on its legal regulation, which is of practical significance. This article defines insider trading from an insider information centered perspective and adopts the following definition for insider trading:those who are possessed of unrevealed material information which has significant influence to the prices of securities, engages in securities trading or assist other people in conducting securities trading by taking advantage of these information. As a securities speculative and fraudulent act which also constitutes unfair competition, insider trading is comprised of insider information, insider people and employment of insider information. Amongst these elements, insider information must be unrevealed and significant; insider people include traditional insider, temporary insider and tippee; while insider trading can be embodied in employment (of insider information), exposure (of insider information) and advising other people to buy or sell securities.The basic theory of regulation on insider trading firstly focuses on the various theories for and against insider trading. The existence of the theories in supportive of insider trading reflects that people do not reach a consensus on the harms what insider trading may bring to the securities market. The analysis on the harms of insider trading further illustrates the necessities of regulating insider trading. With the development of internet and the appliance of new technologies, the digitalization of finance poses a new challenge to regulation on insider trading. Besides, the financial globalization also brings a series of new issues to international supervision of insider trading. The legislation concerning regulation on insider trading mainly involves the legal frame and legislative features of Chinese practice on prohibiting insider trading; the judicial practice on regulation of insider trading dwells on the investigation of insider trading acts, the protection of the rights of the respondents in insider trading, as well as the punishments to insider trading, i.e. the legal liabilities of insider trading.Presently, Chinese securities legislation and legal theories are still lagging behind. There are still many deficiencies with respect to insider trading regulation, for example, the vacancies of related theories and regulations, deficiencies in preventative system design, lack of insider trading civil liabilities and slowness of legal enforcement, etc. Aiming at the deficiencies of China's regulation on insider trading, this article puts forward the suggestion that we should confirm the elements of insider trading acts, including expand the scope of the insider people and further confirm the cirteria of inseder information and so on. Confirm and pursue the responsibility of insider trading, which is not only the necessary measures to protcet the obligee but also the important method to impose sanction against insider trading, consequently, this article puts forward several suggestion as to perfection of China's insider trading regulation, including elements of insider trading liabilities, promotion of insider trading legal enforcement and establishment of civil relief systems, etc.