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Zhou, Tianshu; Li, Wenjing --- "Unpredictable enforcement: a study of the CSRC’s approach to insider trading in China" [2017] ELECD 1131; in Weishaar, E. Stefan; Philipsen, Niels; Xu, Wenming (eds), "Regulatory Reform in China and the EU" (Edward Elgar Publishing, 2017) 67

Book Title: Regulatory Reform in China and the EU

Editor(s): Weishaar, E. Stefan; Philipsen, Niels; Xu, Wenming

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781785368530

Section: Chapter 4

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

Author(s): Zhou, Tianshu; Li, Wenjing

Number of pages: 22

Abstract/Description:

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?