Definition Of Insider Trading

There are many unsuitable conducts in our securities market since it was set up. Insider trading that harms securities market seriously is one of the most important problems. If we want to regulate insider trading successfully, we should define it first. So the subject matter of my thesis is the definition of insider trading. When we talk about insider trading the main content involved is nothing more than four factors. They are the subject of insider trading, inside information, behavior forms of insider trading and the subjective state of insiders. In my thesis, I try to analyze insider trading systematically by explaining these factors. The body of my thesis includes three chapters.Chapter one focuses on the subject of insider trading. I call it insider. This chapter includes four parts. Part one is about traditional insiders. In my opinion, traditional insiders should include the following four kinds: the first one includes directors, supervisors, and senior executives; the second one is controlling person; the third is other persons; the fourth is issuer. About directors, supervisors and senior executives, I have defined two problems. Firstly, who are directors, supervisors or senior executives? Secondly, when do they become directors, supervisors or seniors? About other persons, I propose regarding the relatives and friends of directors, supervisors, senior executives and controlling persons as insiders. Meanwhile, I maintain to regard issuers as insiders, especially define the regulation to the insider trading in the buy-back course of shares of company. Part two is about constructive insiders. I compare and analyze the relevant legislative examples of different countries and regions. And then I suggest that we should try our best to make exhaustive regulations among the written laws in order to limit the abuse of the right of courts. Part three is about tippee. I have explained the definition of this kind of insider and discussed some disputable questions. I think the person who is informed the inside information and the person who is suggested buying or selling relative securities all should be tippee. Part four is about the person who obtains inside information illegally. I think"illegally obtaining"in our securities law should be comprehended extensively. It means that no matter how the person gets the inside information as long as he or she knows the inside information he or she should be insider.In Chapter two, I explain inside information. This chapter consists of four parts. In Part one, I show what inside information is. I introduce legislations in many counties and regions firstly. And then I have defined that primary characters of inside information are the price sensitivity and the closure. In Part two, I discuss the price sensitivity of insider information. I think the price sensitivity of inside information is because of the significance of inside information. I consult advanced legislations about the significance of inside information in many different countries and regions and then I suggest improving our securities law about the definition of inside information. In Part three, I emphasize inside information is unpublicized information. But how can we judge it? How is the information disclosed? I spread my view from three aspects. They are subject, pattern and digestion time. I think information must be disclosed in particular way via the particular subject and during certain digestion time, and then it can be considered to be effective information which is disclosed. In Part four, I talk about some special questions. Firstly, is inside information true? Secondly, what information is inside information in connected transaction? Thirdly, is all of the information that is from insiders inside information? I think misrepresentation and predicting information of the listed company, and the information that is from insiders can be considered as inside information. But the market says are not inside information.Chapter three is about the behavior forms of insider trading and the subjective state of insiders. It is divided into three parts. In Part one, I analyze behavior forms of insider trading. There are three kinds of main behavior forms about narrow sense insider trading. The first one is that the person who knows inside information buys or sells relative securities. The second one is that the person who knows inside information advises others to buy or sell relative securities according to inside information. And the third one is that the person who knows inside information reveals the information to others. In this part, I analyze the constitutive requirement of each kind of behavior forms of inside information. Furthermore, I put forward my own opinions. There are three points I want to stress about this part. Firstly, there are different forms about buying and selling securities. But if the person who knows inside information doesn't buy or sell relative securities he or she is not insider. Secondly, if the person who knows inside information advises others to buy or sell relative securities and the receivers do that following the advise, the person should be insider no matter he or she tells the receivers the contents of the inside information. In Part two, I talk about the subjective state of insiders. Through this part I illustrate the intention and fault of insiders,"being aware of inside information", and"making use of inside information". I think insiders should be aware of inside information clearly. But"making use of inside information"or not is not important. That is to say, though the person who knows inside information doesn't want to make use of inside information, he or she maybe also becomes insider. In Part three, I combine the foreign legislations with the concrete practice of our country and introduce seven kinds of circumstances that can be excluded from insider trading. These seven kinds of circumstances are divided into two main types, general circumstance and special circumstance.In sum, through these chapters I illustrate the definition of insider trading detailedly. In every chapter, I combine the actual conditions of our country with foreign advanced legislations in order to analyze many problems in our securities law. Furthermore I put forward my own suggestions and try the best to solve these problems. So this thesis is meaningful and practical.