Unpredictable enforcement: a study of the CSRC’s approach to insider trading in China

Tianshu Zhou and Wenjing Li

Chapter 4 in Regulatory Reform in China and the EU, 2017, pp 67-88 from Edward Elgar Publishing

Abstract: This chapter makes two important contributions to insider trading research in China. First, from a purely legal perspective, it remains unclear whether recklessness constitutes sufficient grounds for the China Securities Regulatory Commission (CSRC) to punish corporate insiders who leak inside information to tippees without an interest-exchange, or whether the CSRC can punish only de facto conspiracies in which the tipper deliberately provides material information to benefit a tippee. Second and more importantly, beyond these sophisticated technical issues, research on the enforcement strategy of tipper liability has important implications for China’s regulatory and legal institutions. Are the courts meant to act as a check on the CSRC’s power through judicial review? Is the regulator equipped with sufficient resources to address the wide range of insider trading activities in China? Finally, is the regulator under the control of powerful insiders or otherwise corrupt?

Keywords: Asian Studies; Economics and Finance; Law - Academic (search for similar items in EconPapers)
Date: 2017
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