Top court strengthens judicial steps against insider trading

Chinese top judicial authorities have revised a judicial interpretation to address emerging issues involving insider trading and disclosure of inside information, thereby strengthening efforts to combat relevant crimes.

The amended legal document was jointly released by the Supreme People's Court and the Supreme People's Procuratorate on Friday and will take effect on Monday.

Since coming into effect on June 1, 2012, the judicial interpretation on handling criminal cases of insider trading and disclosure of inside information has played a big role in punishing such offenses.

"However, in recent years, new developments and evolving patterns have emerged in crimes related to insider trading and disclosure of inside information, while relevant laws in the securities and futures sectors have also undergone amendments," the top court said.

"To ensure the accurate, uniform, and effective application of the laws, and to enable more precise and robust punishment of such crimes, we have, following in-depth research, broad consultation, and repeated deliberation and refinement, decided to revise the interpretation," it said.

For instance, the revised interpretation explicitly defines the sensitive period for inside information in relation to key actors instrumental to its genesis, closing the door on any attempt to exploit timing gaps for insider trading or tipping. This refinement will reinforce prevention of relevant crimes at the source, the top court noted.

The newly amended interpretation also underscores that acquisitions of listed companies should serve their legitimate purpose, and aims to curb any attempt by acquirers to use "shadow accounts" for insider trading.

The top judicial authorities have called on judges and prosecutors nationwide to accurately understand and apply the interpretation, providing stronger legal safeguards for the sound and stable operation of the capital market by imposing severe punishments on crimes of insider trading and the disclosure of inside information.