Controlling insider dealing through criminal enforcement in China

Zhen Ye, Wangwei Lin, Neshat Safari and Charanjit Singh

Journal of Financial Crime, 2020, vol. 27, issue 4, 1061-1073

Abstract: Purpose - The purpose of this paper is to review the criminal enforcement of insider dealing cases in People's Republic of China's (PRC) securities market and to provide feasible suggestions for improvement for a more coherent and streamlined insider dealing regulatory framework in the PRC during the enforcement of China's new Securities Law (SL 2020) in March 2020. Design/methodology/approach - Through analysing the previous literature on public interest theories and economic theories of regulation, this paper examines the necessity to regulate insider dealing in China with criminal law to ensure fairness and avoid monopolies in its securities market. The paper reviews the criminalising of severe insider dealing cases in China from the Nanking National Government in the 1920s to the inception of the securities market of the PRC in the 1990s to the present day. The investigation, prosecution, enforcement and trial of criminal offences of insider dealing in China are thoroughly examined. Findings - The paper finds a tendency for over reliance on the investigation and the administrative judgement of the China Securities Regulatory Commission in criminal investigation, prosecution and trial in the PRC. Originality/value - To the best of the authors’ knowledge, this paper is one of the first papers to critically and thoroughly analyse the criminal enforcement of insider dealing in China following the recent enforcement of China’s new Securities Law in March 2020.

Keywords: Insider dealing; Criminal enforcement; China; Securities market; Financial regulation (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jfcpps:jfc-05-2020-0089

DOI: 10.1108/JFC-05-2020-0089

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