China may issue a law soon which will set guidelines under which individuals can face criminal charges for securities-related crimes.
Big shareholders at listed firms may face a prison term if their misconduct leads to a corporate loss of more than 1.5 million yuan (US$211,267), according to people who attended the annual session of the National People's Congress in Beijing, reported the Shanghai Securities News yesterday.
China will make it clear in the new law that criminal charges will be slapped on those who commit insider trading, manipulate the market, or disclose false information, as well as other acts that harm the interests of publicly traded companies.
The proposed law comes in the wake of China's growing efforts to crack down on illegal stock trading and activities. Presently there are no laws to deal with such crimes.
Urgent move
Earlier this month, China Securities Regulatory Commission reportedly barred two fund managers from entering the country's capital market permanently and fined them 1.5 million yuan each after they were convicted of insider trading.
But they were not subject to further criminal charges due to a lack of related laws.
Fan Fuchun, vice chairman of the China Securities Regulatory Commission, the regulator, said earlier that it is urgent for the nation's stock market to fight effectively against misconduct such as releasing false information, illegal use of capital from listed companies and market manipulation.
According to the draft law, criminal charges will follow if individuals use insider information to trade stocks worth more than 500,000 yuan or hold more than 30 percent of the total number of shares that are traded to manipulate the market.
(Shanghai Daily March 11, 2008)
