The Research On The Criminal Regulation Of "Rat Trading"

It is well known that,“Rat Trading” is one of the illegal transaction tricks in thefinancial field, which is viewed generally as the “unspoken rule” by insiders. Not onlydoes it seriously damage the interests of retail investors, bring huge losses toinvestors’ property, but also discourage investment, thus hindering the healthy andorderly development of Chinese finance industry. To be frank, it is not exaggerative totalk about that the finance industry will not develop until the “Rat Trading” has beenremoved.Although China has put “Rat Trading” into the Criminal Law, there are manyproblems existing in the application of the law. For instance, it is hard to combat withthe headache of discovering and obtaining evidence in this respect. Therefore, it isnecessary for us to dig into the criminal regulation of the “Rat Trading”, both in thelegislative level and the judicial level, to iron out this problem.This thesis includes four chapters:The Chapter One mainly works on the “Rat Trading” from three respects. Tobegin with, it introduces the concept of “Rat Trading” and reveals the essence of“Buying and selling in Front”. Secondly, by analyzing the specific procedure of thecase of “Tang Jian” and combining with a chart, showing a visual representation ofthe “Rat Trading” operation process. Then, through the analysis of the relationshipbetween the behaviors, making the conclusion that the “Rat Trading” is essentially a breach of trust.Chapter Two is the summary of other countries’ regulation modes and theiradvantages and disadvantages. Though the mode in the UK and the US regulates the“Rat Trading” by the rule of insider trading, the mode cannot apply to the same issuein China because of the form of fund is different. In order to regulate the “RatTrading”, Japan chooses the common and special model of breach of trust, providingus with an appropriate idea. However, there is a suspect of Pocket Crime. In Germanyand Taiwan, the law carries out a detailed definition on “Rat Trading”, thus effectivelyavoiding the legal loopholes. Based on the analysis of the relevant legal model inChina, we should establish the crime of breach of trust by the professional insiders.Chapter III is the prime part of this thesis, mainly analyzing the crime of tradingby making use of undisclosed information. It lays out the objective element in theview of “undisclosed information”,“making use of the job convenience”,“violatingof the regulation”,“explicitly or implicitly engaging others of the related deals”. Thepart focuses on the subject of this crime in the view of Scope of Crime Subject and theaccomplice’s problem. In the last part of this chapter, the author will put forward tosetting up a unit-committing crime and revising the provision of “circumstances areserious” in the respect of reality.Chapter IV is on the consideration of “Rat Trading” in the judicial perspectives,and it digs into the reasons why the crime of trading on nonpublic information has badjudicial effect. Moreover, the author will come up with a proposal to deal with theproblem of “Rat Trading” with the aspect of perfect investigation system and statutorysentence approach.