| SHANGHAI, July 4
SHANGHAI, July 4 China's securities regulator on
Friday said it has handed police five cases of suspected insider
trading at a Chinese-foreign joint venture fund management
company, in the latest announcement of an official clamp-down on
stock market irregularities.
The China Securities Regulatory Commission (CSRC) launched a
probe in March into allegations that five managers at HFT
Investment Management Co had made use of inside information to
trade stocks, and found evidence of suspected criminal acts, the
regulator said in a statement in its microblog.
The regulator launched a sweeping clamp-down on insider
trading in China's $1.2 trillion mutual fund industry this year
as part of efforts to rebuild investor confidence in the
country's lagging stock markets.
The campaign sparked an exodus of fund managers from the
industry, with more than 100 quitting their jobs so far this
year, almost twice as many as in the same period last year,
according to data provider iFund.
"The CSRC will all along maintain high pressure on (all
parties responsible for) irregularities including stock trading
using inside or disclosed information," the regulator said in
the statement. "Once such acts were found, they will be dealt
People in the industry have told Reuters that the regulatory
clamp-down on trading irregularities involving funds has focused
on so-called "rat trading".
Rat trading involves an employee illegally obtaining
information about client orders to buy or sell shares, and then
using that information to trade for themselves before the order
Regulators are also investigating tip-offs by fund employees
to relatives or friends on what stocks the fund plans to buy or
sell, allowing them to trade in advance of any movement in the
stock price caused by the fund's activity.
A staff member, surnamed Jiang, at the customer service
department of the HFT said the company had not yet received any
official notification from the regulator.
"We haven't received any notice," he said when contacted by
Reuters. "I think our company will have some statement on this
later, but we haven't had it yet."
The HFT is jointly owned by China's Haitong Securities Co
Ltd and France's BNP Paribas Investment Partners BE
(Editing by Christopher Cushing)