RULES ON INSIDER TRADING TIGHTENED

The government has issued the Supplementary Rules to the Standards for Pursuing Economic Crime Cases on May 13 to crack down on an increasing number of illegal financial activities such as insider trading and market manipulation.

Issued by the Supreme People's Prosecution and Ministry of Public Securities, the Supplementary Rules to the 2001 Standards have increased the threshold of trading volume from Rmb200,000 to Rmb500,000 and added a test for profits or avoided losses of over Rmb150,000.

“The Supplementary Rules are a gap-filler for enforcing the Criminal Law by the prosecution and investigation authorities and also provide certain thresholds for Securities Law,” said Greg Pickrell, partner at Pillsbury Winthrop Shaw Pittman. Under the Securities Law, the Supplemental Rules will affect some provisions on criminal liabilities. Though the Securities Law has laid down in great detail various types of offenses, the context of specific offenses has no explicit references to the Criminal Law, Pickrell said.