The State Council’s efforts to crack down on insider trading in the country’s capital markets has been fraught with difficulty as the illegal activity become more hidden and complex, according to the official statement on its website.

As the stock market continues to be plagued by many insider trading scandals, the State Council, the country’s highest executive body, recently introduced new measures to crackdown on the illegal trading activity.

The council is seeking to tighten and formalise the rules governing confidentiality of information on listed companies, and is increasing scrutiny of government officials with access to such information. It is also looking to overhaul the mechanism for accountability. So far, no time schedule has officially been given.

The move involves the collaboration of government agencies like China Securities Regulatory Commission (CSRC), the Ministry of Public Security, the Ministry of Supervision and the State-owned Assets Supervision and Administration Commission.

Although the move will not impact the legal industry directly, lawyers welcome the new measures. “If enforced properly, especially now that it involves collaboration between various state agencies, the measures will have a broader impact and hence promote a fairer and healthier market environment,” said a Beijing-based lawyer.

According to CSRC, since 2008 it has investigated 295 insider trading cases – 45% of the total cases filed during the period. In the ten months to the end of October this year, it has carried out 100 preliminary investigations, 74 of which are on insider trading; and 88 officially filed investigations, where 42 of which are insider trading cases. ALB