| Since its inception in1990, China stock market has developed rapidly and played an important role in optimal allocation of resources and other areas. But it is undeniable that there are many issues of concern in the development of the stock market, insider trading is one of them. There is still a great deal of insider trading in the stock market, although regulatory authorities have continuously strengthened and improved the regulatory system through the enactment of relevant laws and the reinforcement of law enforcement, so we have questioned the effectiveness of supervision on insider trading.Study on insider trading in the stock market and its regulatory effectiveness has always been a focus of attention of scholars. In China, this kind of research began in the beginning of this century, and mostly concentrated in the legal aspects. The empirical research to examine the effects of insider trading regulation is less, the literature from a historical perspective to study the effectiveness of insider trading regulation is only a handful. Therefore, this paper utilized the event study method, taking2000-2011M&A events of listed companies as samples, to analyze the status quo of the insider trading in China’s stock market by examining the cumulative abnormal returns and relative trading volume and other indicators in the event window period. And then it examined the validity of the insider trading regulation from the vertical angle by comparing relevant indicators of the two-stages before and after the implementation of the new "Securities Act" in January1,2006.The study shows that:there has always been insider trading in the stock market whether it is before or after the implementation of the new "Securities Act"; the formal promulgation and implementation of the new "Securities Act", to some extent, has curbed the insider trading, the regulatory has achieved remarkable results. Therefore, this paper argues that the regulation of insider trading is necessary and effective. |
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