The chairman is the main person responsible for the truthfulness, accuracy and completeness of the registration files
Soliciting opinions on the regulations on the registration and management system of insiders of listed companies
□ Our reporter Zhou Fenmian
In response to the new Securities Law and combined with regulatory practices, the China Securities Regulatory Commission recently issued the "Regulations on the Registration and Management System of Insiders of Listed Companies' Inside Information (Draft for Comment)" (hereinafter referred to as the "Registration Management System") to further regulate the inside information of listed companies The registration and reporting of insiders will strengthen the comprehensive prevention and control of insider trading.
Zero tolerance for insider trading
Insider trading is an illegal act conducted by insiders using inside information.
The China Securities Regulatory Commission has repeatedly emphasized that it will continue to maintain a high pressure on insider trading and has zero tolerance for insider trading and other securities violations.
He Haifeng, a lawyer at Tiantong Law Firm, said that illegal insider trading has caused multiple harm to the market.
From the basic principles of the securities law, insider trading seriously violates the three principles of openness, fairness, and justice; for public investors, insider trading damages their equal rights to know and property rights; from the perspective of the securities market, insider trading destroys the market Capital pricing disrupts the order of the financial market.
Fan Jian, a doctor of law at Shanghai University of Finance and Economics, said that insider trading is a typical "white-collar crime" behavior, which has the characteristics of good concealment, strong anti-investigation capabilities, and huge amount of money involved.
Insider trading behaviors will cause investors to lose confidence in the securities market, and may also leak important company information (such as mergers and acquisitions information, etc.) in advance, thereby damaging the company’s normal operations; it will put securities analysts at a disadvantage and discourage their analysis The enthusiasm of the company's fundamentals; it will also encourage irrational investment behavior. Investors are speculative and actively explore the so-called inside information, and are finally "cut leek."
Experts say that cracking down on insider trading requires tightening the fence of the system and starting with standardizing insider information.
From "establishment" to "perfect implementation"
In 2011, the China Securities Regulatory Commission issued the "Regulations on the Establishment of Insider Registration Management System for Listed Companies" (ie, relevant old regulations), and the target is the Securities Law after the first amendment in 2005.
According to the relevant person in charge of the China Securities Regulatory Commission, listed companies have generally established this system, and the main task now is to "improve and implement it."
Yang Dong, a professor at the Renmin University of China Law School, said that since 2016, under the continued high pressure of the Securities Regulatory Commission’s inspections and enforcement, the proportion of insider trading in all registered cases has dropped from 51% to 24%.
Although the overall situation of insider trading cases has been curbed to a certain extent, the number of cases of insider trading directly engaged in insider trading has gradually decreased. Passive insider trading has increasingly become the main type. Insider trading has become more concealed and complex, and information has a wide and rapid spread. The impact and harm are more serious.
From the perspective of the transmission target, the characteristics of "grouping" and "nepotism" of insider information transmission are obvious. From the direct blood relatives of the legal insider information insider to other close relatives, friends, classmates, colleagues, etc., insider information has also appeared to cooperate with business. Cases in which stakeholders such as partners, children’s school principals, and party and government cadres where the company is established leaked inside information for profit.
The reason for "perfection", in addition to actual needs, is to benchmark the new securities law that will be implemented in March this year.
The new securities law lists up to nine types of insider information in Article 51, and in Article 80, paragraph 2 and Article 81, paragraph 2, a total of 23 major events are clearly defined as inside information. .
"This greatly expands the scope of insider information and insider information matters, and strengthens the legal liability of insider trading." Yang Dong said.
It is worth noting that the word "established" in the "Regulations on the Establishment of a Registration Management System for Insiders of Listed Companies," which was previously a related old rule, has been cancelled.
The chairman is responsible for registration and submission
Fan Jian said that, compared with the old rules requiring listed companies to be responsible entities to ensure the truthfulness, accuracy and completeness of insider information, the "Registration Management System" assigns responsibilities to individuals and clarifies that "the chairman is the main responsible person. The board secretary is responsible for handling The registration and submission of insider information insiders of listed companies. The chairman of the board and the board secretary shall sign written confirmation opinions on the truthfulness, accuracy and completeness of insider information insiders’ files."
Therefore, if there is an error in the file of the insider, the chairman and the board secretary may be held accountable.
The "Registration Management System" also strictly enforces the responsibilities of listed companies, which means that listed companies are required to timely supplement and submit relevant insider files and memorandums on the progress of major events in accordance with changes in major events.
Fan Jian said that the "Registration Management System" also strengthened the power of the stock exchange.
New regulations: The stock exchange shall, in accordance with the needs of insider trading prevention and control, make specific regulations on the scope of major matters involved in the filing of insider information of listed companies, the specific content of the filing, and the scope of filing personnel.
The second paragraph is added to Article 10 of the "Registration Management System": "The stock exchange shall, based on the nature and degree of influence of major events, make specific provisions on matters that need to make a memorandum on the progress of major events and the content to be filled in."
As the front line of supervision, the stock exchange should promptly share information such as insider files and memorandums on the progress of major events with the CSRC and its dispatched agencies.
Looking forward to relevant judicial interpretations
To combat insider trading, law enforcement should also be strengthened.
The China Securities Regulatory Commission has been active.
Yang Dong said that the China Securities Regulatory Commission has strengthened "big data" to screen for clues of abnormal transactions. Based on the principle of "zero tolerance", "full coverage" and "no dead ends", the third batch of special law enforcement actions focused on investigating and punishing insider trading, with particular emphasis on cracking down Pass-through insider trading.
Regarding the investigation of criminal responsibility, those who constitute a crime also have corresponding charges in the criminal law, but there are still obstacles in the court trial.
The lack of a clear judicial interpretation is the biggest shortcoming.
He Haifeng said that insider trading is one of the few illegal acts involving civil, administrative and criminal liabilities in the securities sector.
Insider trading cases occur frequently and cause great harm, but judicial precedents for such disputes are relatively rare in practice.
This is because, compared with the types of securities fraud disputes such as false statements, insider trading disputes are more complicated in terms of liability constitution, loss determination, and causality. In a few cases of insider trading disputes, the failure to prove causality becomes the plaintiff. Reasons for losing the case.
The more important reason is that the judicial interpretation of the trial of civil compensation cases for insider trading in my country is still blank.
The court was also more cautious in accepting the case.
Fan Jian also holds a similar attitude towards the problems caused by the lack of judicial interpretation.
He said that in civil litigation, due to the lack of judicial interpretation, the determination of the qualified plaintiff of insider trading, the method of calculation of losses, and the determination of causality, there are more disputes in practice.
Moreover, insider trading actors are often sued by investors after they have been subject to administrative penalties and confiscation of illegal income and fines. Therefore, in most cases, they have no financial ability to compensate investors.
Therefore, from the perspective of judicial practice, insider trading civil litigation cases are very rare.
Fan Jian believes that the Supreme Court needs to curb insider trading from a civil perspective and protect the rights and interests of investors by formulating judicial interpretations or choosing guiding cases.