The China Securities Regulatory Commission (CSRC) has worked out confirmation standards regarding insider trading and market manipulation, in an effort to guarantee healthy development of the capital market, the Xinhuanet reported today.
At CSRC's special training on investigating and confirming insider trading and price manipulation, Fan Fuchun, vice chairman of the securities market watchdog, indicated that the undercover dealings are surging and the manipulation methods are updating. Both are a concern because they disturb normal market order and harm investors' interests.
The methods on alleging insider trading enlarged the scopes of insiders and inside information, and posted detailed burden of proof for mater-of-course insiders, statutory insiders, stipulated insiders, and those acquiring inside information via other channels.
Meanwhile, market manipulation recognition methods exposed and targeted a number of updated manipulation tactics, such as bogus applications, preemptive or demagogic transactions, as well as special and closing-up transactions.
The investigation, confirmation and treatment on insider trading and manipulation are "hard nuts to crack" not only in China, but also worldwide, Fan added.
While China remains the world's fastest-growing economy and is continuing reform on equity shareholdings, the level of inside information is swelling as a consequence of an ascending number of mergers and acquisitions, which also creates more market irregularities.
Shang Fulin, chairman of CSRC, also suggested the fundamental market laws and regulations construction and a counterbalanced multi-level market structure are the prerequisite to promote the reform and opening of capital markets. Risk education and prevention are also essential.
(Chinadaily.com.cn September 6, 2007)