General Office of the State Council, Circular on Transmission of the China Securities Regulatory Commission and Other Departments, Opinion on Combating and Safeguarding against Insider Trading in the Capital Markets in Accordance with the Law

国务院办公厅转发证监会等部门关于依法打击和防控资本市场内幕交易意见的通知

December 14, 2010 | BY

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A system for registering the informed persons of insider information to be established.

Clp Reference: 3700/10.11.16 Promulgated: 2010-11-16

Issued: November 16 2010

Applicability: The term “insider trading” refers to the seeking of private gains by senior management personnel, controlling shareholders, de facto controllers of listed companies, and the informed personnel of administrative examination and approval authorities by taking advantage of their office to divulge information or to purchase and sell securities using insider information prior to the announcement of material information such as a merger, acquisition or business growth (Article 1).

The term “insider information” means not-yet-publicised information that has a major impact on the listed company's stock price such as information concerning the business operations, finance, distribution, investment, financing, merger, acquisition, re-organisation, and changes in key personnel of the company.

Main contents: To effectively prevent insider trading, the following systems shall be improved:

(i) formulate a system to maintain the confidentiality of listed companies' insider information, including formulating the measures for administration of access to insider information by working personnel of the state, specifying the scope and flow of insider information, the measures for maintaining confidentiality and the requirements for pursuing liability, and designating the authority and personnel responsible for managing insider information;

(ii) establish a system for registering the informed persons of insider information, and confirm the responsibilities and obligations of the relevant personnel for maintaining confidentiality;

(iii) improve the systems for information disclosure by listed companies and the suspension and resumption of their stock trading;

(iv) include the tasks of safeguarding against insider trading in the performance assessment system of enterprises; and

(v) improve the rules for determining and proving insider trading acts, and proactively seek to establish the reward system for reporting insider trading acts (Article 2).

clp reference:3700/10.11.16promulgated:2010-11-16

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