On Security Investment Fund Exemptions From Disgorging Short-Swing Insider Profits

As insider trading in securities market has a serious impact on market and bring harm to investors, supervisors of different Countries adopt strict regulations to prohibit it from being happening. One of the regulation systems is "disgorging short—swing insider profits", which prohibit insider person from being involved in such deals by pre—situated rules of threatening, and which is a definitely advanced system. Proved by practice, one can effectively prevents insider trading and protects fairness by using this system."Disgorging short—swing insider Profits, means a company has the right to get the profits made by its directors, officers and major shareholders who make these profits by using the way of short—swing trading to deal with its securities in a relatively short time (i.e.6months), no matter whether they have made use of insider information, or what their intentions might be when they were doing this.Everything has two sides. As disgorging short—swing insider Profits is simple and crude", in its implementation, there are some phenomenon that bound to be violated legislative intent and hindered the development of securities market. For various reasons, China’s securities investment fund applied to the disgorging short-swing insider profits damage the interests of fund investors and hinder fund industry development. So it is necessary to balance the contradiction of simple and mechanical by providing for exemption terms, and then solve the problem for the Fund.This article makes an insight into security investment fund exemptions from disgorging short-swing insider profits in six different aspects:Preface uses the historical analysis to descript the origin of the disgorging short-swing insider profits.Chapter one uses the Empirical and normative analysis to point out the problem and its reason of security investment fund applied to the disgorging short-swing insider profits in our country,then point out that security investment fund is necessary to applying to the disgorging short-swing insider profits flexible.Chapter two uses the historical and Comparative analysis to introduce the Special Designs and Inspirations between America and the Taiwan area of china,then compare the advantages and disadvantages of two models, and point out that the Exemption model of the America should be adopted at the present stage.Chapter three discuss the necessity and feasibility of security investment fund exemptions from disgorging short-swing insider profits.Chapter four point out that we should use Exemption model with some conditions and analyze the reasons for not fully exempt, then point out the conditions for exemption.The last chapter is about the ideas of Improvement of the disgorging short-swing insider profits.In my opinion,we can solve the problem through Exemption or authorization the China Securities Regulatory Commission to develop rules to increase the exemption for the securities investment funds, and improve relevant systems.