Research On The Objective Elements Of Inside Trading

The healthy development of securities market is of much significance to thenational economic development and the growth of the people’s wealth. China’ssecurities market has been through30years of development, however, there are stillmany problems remaining in the overall trading system, supervision system andprotection and relief mechanism, among which, securities insider trading seriouslythreatens the fair, open and impartial trading environment in the stock market. Thelegislative purpose of "Criminal Law" is to punish crime, to protect the people, and,according to the constitution, to formulate corresponding legal rules, combining bothspecific experiences in China’s old fight against the crime and actual situationstogether. Whereas as a matter of fact, there are still some loopholes in provisions onthe insider dealing crime, from the "Criminal Law" to the " Interpretation of theConcrete Application of Law in Criminal Cases of Leaked Insider Information andInsider Trading in the Securities ", thus, it is a necessity to analyze and evaluate thepoints, which are incomplete, unscientific, unreasonable or inappropriate in the"Criminal Law" and the " Interpretation of the Concrete Application of Law inCriminal Cases of Leaked Insider Information and Insider Trading Criminal.The first part of this paper is about the definition of inside information.Researching both aspects of volatility and nonpublic which inside information hadinfluenced on the price of securities and futures. I illustrated the operation of insidetrading through giving examples about the price volatility. To analyze the illegalprofits mode of insider trading by giving examples on the influence of the securitiesand futures.The second part of this paper is about presumption of abnormal behavior ofinsider trading, to analyze and demonstrate on the sensitive period of time and stresson the necessary and feasibility of the unity and standard of sensitive period, escapeof the decision model focused on the habits and ordinary trade mode in “theinterpretation about dealing with insider trading and divulging inside information concreted on application of law in criminal cases”. One is to clarify the status ofinsider information about inside trading. The second aspect is to judge the abnormalinside behavior through the relation of benefits, the third aspect is to research on themodel of “rational investors” to identify the abnormalities of the behavior of insidetrading through the objective way.The third part mainly defines the studies the "express" and "suggested" in theobjective aspect of inside trading focused on the criminal law amendment (7).The last part is mainly studies the processing considering different crime amount.By analyzing the different varieties of securities and futures that crimes related to, Ithink we can set the criminal penalty points in different ways to achieve the purposeof appropriate punishment for crime.There is a large number of professional concepts of stock market investment andin view of the author’s understanding of legal theory ability is limited, so please bekindly if there are some mistakes.