The Effect Research On The Regulation Of Insider Trading In China’s Stock Market

Since1990, when the Shanghai and Shenzhen stock exchange has been established,20years or more passed, in which bull markets and bear markets keep alternating, but they still maintained a rapid expansion trend and today the total market value of the Shanghai and Shenzhen stock exchange has surpassed Japan, becoming the world’s second largest stock market, which is second only to the United States of America. And accompanied by the growth of stock market is not only the achievements, but also many questions to resolve, in which insider trading is one that can not be ignored. In1999, the issue of " Securities Law" symbolized the regulation of insider trading in officially, in what extent did the regulation of insider trading make sense and how should the regulatory authorities improve the regulation of insider trading. In this paper, by the event study method which domestic and foreign scholars on the insider trading empirical study often used, I want to do some historical investigation and international comparison on the stock market insider trading regulation, in order to put forward some advice and reference for the regulatory authorities of insider trading regulation of China.This paper from the actual situation of the stock market regulation of China, objectively analysed the main theoretical schools of insider trading, and introduced the research methods. On this basis, using the assets restructuring listed companies trading data in Shanghai and Shenzhen stock market from January1998to December2010as samples, reseached the actual effect of insider trading regulation from the historical perspective, and demonstrated the inhibition on insider trading behavior. Using the asset restructuring listed companies trading data of China and U.S.A from January2000to December2008as samples, compared abnormal return and severity of insider trading as well. The results show that:the issue of "security law" of China which symbolized the official set up of insider trading regulation do have great effect on insider trading behavior, not only makes the excess return to shrink, but also makes the stock market to be more stable; however, compared to the U.S.A, we still have a lot of work to do.