Punishing Possession - China's All-Embracing Insider Trading Enforcement Regime

Document Type

Article

Publication Date

2012

Abstract

可以發現，中國版本的這篇文章：ssrn.com/abstract=2305720

This paper presents a general introduction to the law of insider trading in the People's Republic of China, and the reality of enforcement against insider trading in China's domestic capital markets. The paper focuses on the extremely broad scope of insider trading liability created under internal administrative guidance formulated by the Chinese securities regulator, which departs significantly from the more narrowly-drawn insider trading prohibition established in China's 2006 Securities Law. Although the statute establishes a relatively narrow combination of the classical/fiduciary duty plus misappropriation theories for liability, the agency guidance -- formally and in application -- assures liability for trading when merely in possession of inside information. The paper concludes with a meditation on what this problem might mean for China's growing capital markets and regulation of them, in isolation and as those markets become ever more integrated with global markets.

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