The Governance Research Of Rat Trading In The Chinese Securities Market

Rat Trading refers to the behavior that the dealer use personal capital to open a position in low order before he use the public money to draw high the stock price, and sell personal position first to obtain benefits after he use the public money to achieve the high order. In view of the constituent element of its definition, the similarity of the substance, the method of operation and the manifestation, rat trading is interwoven with insider trading and stock manipulation.With the continuous development of the Chinese securities market, facing the great temptation,"Rat Trading" cases appear frequently in recent years, such as the relevant party interested and relatives of the key person in charge of listed companies participate in stock jobbing, boom and drop or securities investment funds. The rampant rat trading behavior relies on the driving force in theory, and is also a result of deficiency in the judicial supervisory system. Moreover the moral hazard and confidence of the participants in the securities market play a role. The rat trading phenomena typically in the fund market is becoming more and more grievous, and have become the focus of the public. What is more important is that we need to think how to bear the civil liability and who to bear it. It is significant to define the person liable. Not only the rat trading manipulator should be deservedly punished severely, but also his company or the supervision department deserves strict regulatory constraint and punishment for the purpose of a clean sweep.At present due to the mild punishment on the behavior and the relatively small proportion of investigation and prosecution, shortage of relevant theoretical research and lack of propaganda which weaken the public recognition and prevention awareness and poor supervisory system in the securities market, the illegal behavior can not get investigation and prosecution timely. The regulatory constraint of penalizing organs to the fund companies and relevant persons liable still contains limitations. This paper analyzes the necessity to define the relevant persons with the help of game theory.With the advent of complete free-float era in the Chinese securities market, stock selling restrictions get release bit by bit. Transactional rat trading appears inevitably, and its growing is not incidental. Something hidden behind is the limitations of the state macroscopic readjustment and control and the drawback of the supervisory systems of the relevant supervision departments. How to improve the administration is one innovative idea.The second innovative idea:to demonstrate the game playing among the investors in the rat trading from the standpoint of game theory.The third innovative idea:to probe the homological significance combining the relevant theories of economics and law.