Regulation Of Insider Trading On The Legal And Economic Analysis In China

Insider trading is the product of stock market's development process itself, since 1611 Amsterdam, The Netherlands has established the first stock exchange, securities market has been a history of 400 years of development.In the process, a securities speculation, market manipulation, insider trading, fraud and other acts have emerged inevitably. Among these acts,is insider trading that has a huge negative impact to the social and economic costs.In order to effectively curb insider trading, most of countries in the world have developed a strict securities laws and regulations. Restrict of insider trading in China was first seen in a number of regulatory norms ordinance.Since 1993, We began to speed up the legislative process of stock market, introduced the "Provisional Regulations on stock issuance and transaction management "and"Provisional Measures against securities fraud",which strengthened the regulation of stock market.In 1998, China passed the "Securities Law".In 2005, the newly passed"Securities Law"'s section 74,75,76 have made inside information on staff, insider information, insider trading clearly. However, despite the country's legislation on insider trading is gradually improving, insider trading is still intensified. It has been reported that during the 2010, as many as 87 cases of insider trading have been investigated, but this number compared to which have not been investigated is just like a drop in the bucket in terms.From an economic point of view, I believe that there are some reasons for this situation as follows:low cost of violation; high cost of government regulation; high cost of rights' protection of victims. With the stock market's development, the negative effects of these problems will increase. Therefore, our urgent need is to improve the illegal costs of insider trading, reduce the cost of government regulation and reduce the costs of the victim.Through the establishment of burden of proof inverted principle, enlarging the power of SFC and improving efficiency of civil compensation,so as to build a system that can control insider trading before,during and after.In this paper, I will analysis insider trading combined to economic theory by the following four-part. The first chapter is about the definition of insider trading and related issues, including the siganification's development of insider trading and the meaning of insider trading's components in the academic development.The second chapter is about the analysis of insider trading's economic nature, and some personal opinions combined with the controversy of regulations of insider trading.The third chapter elaborates on the legal regulation's historical development of insider trading, and analysis the problems of current legal regulation of insider trading,combined with a specific case. The fourth chapter,in the view of cost - benefit perspective of economics, talk about the reason of insider trading is low cost of illegal and high cost of rights, and put forward a sound case for the recommendation of legal regulation of insider trading.