Clamping down on insider trading

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clpstaff &clp articles

An Interpretation from the CSRC uses for the first time a doctrine of guilty before innocent for insider trading cases. But with few cases before the courts, it is not clear how effective the Interpretation will be

In 1997, the PRC Criminal Law (中华人民共和国刑法) introduced insider trading as on offence. However, due to the complexity of this offence, which requires special expertise and the lack of detailed rules, from 1997 to 2010, only 11 cases of insider trading went before the courts. Both the public and the government believe that the actual number of insider trading crimes must be far higher than this number.

On March 29 2012, after more than two years of research and discussion, the Supreme People's Court issued the Interpretation on Several Issues Concerning the Specific Application of the Law in Handling Criminal Cases of Insider Trading and Leaking of Inside Information (关于办理内幕交易、泄露内幕信息刑事案件具体应用法律若干问题的解释), which sets up detailed rules for prosecution and conviction of insider trading crimes and came into effect on June 1 2012.

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