Relatives targeted in insider info fight
By Winny Wang and Leo Zhang |
01:04 UTC+8 April 3, 2010
|
Print Edition
Print Edition
CHINA has bolstered efforts to clamp down on insider trading by restricting equity trading by immediate relatives of staff at fund management firms, according to a regulatory document and industry sources.
Parents, spouses and children of those working at fund houses must seek company approval before buying stocks, futures and other derivatives, according to a notice sent to fund firms last month and obtained by Shanghai Daily yesterday.
The relatives must open their accounts at brokerage outlets designated by the fund companies, the notice said. The fund management companies should appoint executives to supervise their trading, according to the notice.
"Everyone in our company, including those doing administrative work, is required to offer information on trading by immediate relatives," said an employee at a Shanghai-based fund firm. "We are drafting measures to implement the regulatory guideline."
Under the securities law, all employees at fund companies on Chinese mainland are banned from directly buying or selling any equities. Previously there were no rules governing trading by other relatives.
The China Securities Regulatory Commission has been boosting efforts to fight misconduct after noticing a new wave of irregularities with the recovery of the stock market and resumption of initial public offerings in June.
CSRC Chairman Shang Fulin has called for more stringent supervision over the equity markets and stricter punishment for investors who try to manipulate stock prices and are involved in insider trading.
In November, three fund managers in south China's Shenzhen were suspected of using insider information to make huge profits from the stock market.
"The campaign to battle irregularities will certainly be revved up as the market becomes sophisticated," said Zhang Xingzhe, a Bank of Communications analyst. "Protecting the interest of minority investors should be the top priority of the regulator."
Parents, spouses and children of those working at fund houses must seek company approval before buying stocks, futures and other derivatives, according to a notice sent to fund firms last month and obtained by Shanghai Daily yesterday.
The relatives must open their accounts at brokerage outlets designated by the fund companies, the notice said. The fund management companies should appoint executives to supervise their trading, according to the notice.
"Everyone in our company, including those doing administrative work, is required to offer information on trading by immediate relatives," said an employee at a Shanghai-based fund firm. "We are drafting measures to implement the regulatory guideline."
Under the securities law, all employees at fund companies on Chinese mainland are banned from directly buying or selling any equities. Previously there were no rules governing trading by other relatives.
The China Securities Regulatory Commission has been boosting efforts to fight misconduct after noticing a new wave of irregularities with the recovery of the stock market and resumption of initial public offerings in June.
CSRC Chairman Shang Fulin has called for more stringent supervision over the equity markets and stricter punishment for investors who try to manipulate stock prices and are involved in insider trading.
In November, three fund managers in south China's Shenzhen were suspected of using insider information to make huge profits from the stock market.
"The campaign to battle irregularities will certainly be revved up as the market becomes sophisticated," said Zhang Xingzhe, a Bank of Communications analyst. "Protecting the interest of minority investors should be the top priority of the regulator."
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