A Study On The Determination Of Insider Trading In China

With the rapid development of the securities market in our country,various financial instruments were created, the trading operation also updated constantly with the development of electronic technology, the new situation has been testing the applicability of the law, also brings challenges to securities supervision. “The fat-finger incident of Everbright Securities” sounds the alarm, let people focus on the legality of doing hedges before disclosing the information, the disposition of emergency situation, the computation rule of illegal earning, the countermeasure of civil compensation, etc.This paper use the case on administrative punishment of Yang Jianbo v. China Securities Regulatory Commission as an example, according to current legislation, analyzing whether it constitutes insider trading if someone do hedges before disclosure in fat-finger incident. Besides introduction and conclusion, the paper has five parts.The first part is the introduction and issues of the case, there are three issues of the case, first, whether the information of wrong bill constitute inside information according to Securities Law and Administrative Regulations on Futures Trading; Second, whether the hedges constitutes pursuant plan to defense using inside information; Third, whether Yang Jianbo constitutes other directly responsible person.The second part analyzes whether significant, non-public, relevance and certainty is the required attribute of inside information according to the current legislation in China and referring to foreign legislation, based on these discussion, analyzes whether the inside information should be relevant to the management of the company, whether the news report can be recognized as information disclosure, finally, concludes whether the information of wrong bill is the inside information.The third part, analyzes whether the hedges constitutes pursuant plan which may defense inside information. This part contains three progressive propositions, first, whether the hedges is according to market neutral strategies. Second, whether the hedges according to market neutral strategies constitutes pursuant plan. Third, whether the pursuant plan can be the exemption matter in this case.The forth part analyzes whether Yang Jianbo constitutes the other directly responsible person according to his performance in this case.The fifth part makes a discussion on the verdict according to legal basis and jurisprudence, providing enlightenment to juridical practice.