Research On The Prevention System Against Insider Trading

As a derivative of the securities market,insider trading has been brought into play with the development of the securities market since its initial established 200 years ago. Inside trading hurts not only the public company and investors'interests, but also the securities market even the whole national economies. The legislation is regarded as the best tool against insider trading and has been widely accepted in the world since the first legislation was appeared in 1930s in the US, and now the campaign of making such laws was popular all over the world. To rule the violation of the law, besides redress and punish, prevention is very importance. The law prevention system aims to prevent from or reduce the lawbreaking behavior taking place. The prevention is especially crucial for avoiding inside trading because inside trading is always complicated with a difficult process to get evidence and always be great harmful. Now many countries constitute the prevention system against insider trading in Company Law and Securities Law, which include Insider Report System, Information Discloses System, Behavior Limit System and Internal Control System.China's securities market has made glorious achievement in its 22 years development, but the legal system of the securities market including the research on the prevention system against insider trading is far from enough. The author firstly descript below three core components of insider trading:inside information,inside personnel and inside dealing behavior, and then make an analysis to show the exact meaning of insider trading. Western countries'securities market and their legal system are more mature than china, and the U.S. securities legislation is always the model in the world. In the Third Chapter, the Author makes a good introduction of the numerous legislation and practices experience in the Western countries, in order to make these experiences for our reference. China has basically established the prevention System against insider trading, and relevant regulations which are contained in the Securities Law,Company Law and other issues published by China Securities Regulatory Commission. But there are still many deficiencies. As a conceiving to perfect the prevention system which is faulty in form and content, by referring to international legislation and practical experience, and using the comparative method, theory with practice methods, The author hope that it can be used for perfecting our legislation to prevent insider trading.