Stock Sheriff Swaggers

China’s securities regulators say they are closing some of the loopholes in the regulations released in Dec. 2006 intended to rid the country’s Wild West stock market of insider trading and other illegal stock transactions.

A statement, jointly issued by the Supreme People’s Court, the Supreme People’s Procuratorate, the Ministry of Public Security and the China Securities Regulatory Commission, focuses on illegal share issues, and tightens the wording of the original regulations whose ambiguities, the commission says, have let 90% of transactions it believes to be illegal, escape prosecution. Details via China Daily here.

One rampant area of abuse that needs tackling is the widespread front running by managers of state-run investment funds, in which individuals buy for their own account ahead of a much larger and marketmoving buy by the fund they manage.

The new announcement promises that some exemplary cases will be brought before the courts. We’ll see. Just as we’ll see how the regulators will tackle the task of cleaning up the market without pulling the rug from under prices.

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One response to “Stock Sheriff Swaggers

  1. Pingback: Cracked « China Bystander

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