China will soon publish precise definitions of what constitutes insider trading that would make it easier to prosecute and punish illegal traders, the New Century magazine reported on its website, citing sources with knowledge of the situation.

In recent years, China has cracked down on malpractices in the stock market as part of efforts to deepen reform of its capital markets, but the country's immature legal and judicial systems have made the fight against insider trading a tough one.

China's Supreme Court will soon publish interpretations that would allow the use of indirect evidence in determining insider trading, broaden the definition of insiders and provide a legal basis for seeking civil compensation, the magazine said.

For example, records of telephone conversations or short message services ahead of trading activities, even without traceable content, can be used as evidence to help determine insider trading, the article said.

The rules will clarify what is legal and what is not when obtaining information . Unintentional acquisition of information, such as a cleaner happening to see a document, is considered legal, while obtaining information through stealing, spying or bribery is considered illegal, the article said.

The High Court will provide some legal basis regarding civil compensation to victims of insider trading, though China is not likely to roll out any mechanism supporting U.S.-style class action any time soon, the article said.

The China Securities Regulatory Commission (CSRC), the industry watchdog, has regularly published statements about insider trading on its website, in addition to holding symposiums on the issue, after China's cabinet ordered a crackdown against the practice in late 2010.

The CSRC took on 83 new cases of market malpractice in the first half of 2011, including 45 cases of insider trading.

(Reporting by Samuel Shen and Jacqueline Wong)

China Insider trading