Recently, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council have issued the “Opinions on Strictly Cracking Down on Illegal Securities Activities in accordance with the Law” and issued a notice requesting all regions and departments to conscientiously implement them in light of actual conditions.
The main contents of the “Opinions on Strictly Cracking Down on Illegal Securities Activities According to Law” are as follows.
Cracking down on illegal securities activities is an important guarantee for maintaining the order of the capital market and effectively exerting its functions as a hub of the capital market. Since the 18th National Congress of the Communist Party of China, all relevant parties have conscientiously implemented the decisions and deployments of the Party Central Committee and the State Council, steadily promoted the construction of the capital market law enforcement judicial system, cracked down on illegal activities in the capital market in accordance with the law, and safeguarded the legitimate rights and interests of investors, achieving positive results. At the same time, under the background of profound changes in the economic and financial environment and the continuous deepening of reform and opening up of the capital market, illegal activities in the capital market are still more prominent, the difficulty of investigating cases has increased, and relevant law enforcement and judicial work is facing new situations and new challenges. In order to further promote the high-quality development of the capital market, the following opinions are hereby provided for strictly cracking down on illegal securities activities in accordance with the law.
1. General requirements
(1) Guiding ideology. Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, fully implement the spirit of the 19th National Congress of the Communist Party of China and the 2nd, 3rd, 4th, and 5th Plenary Sessions of the 19th National Congress of the Communist Party of China, adhere to the direction of marketization and rule of law, adhere to the establishment of systems, and non-interference , Zero tolerance, strengthen the construction of the capital market infrastructure, improve the system and mechanism to strictly crack down on securities illegal activities in accordance with the law, improve the effectiveness of law enforcement and justice, effectively prevent and resolve major risks, and accelerate the construction of a standardized, transparent, open, dynamic and resilient capital market Provide strong support.
(2) Working principles
—— Adhere to the zero tolerance requirement. Strictly investigate and deal with securities violations and crimes in accordance with the law, intensify the investigation and punishment of major and important cases, strengthen integrity restraint and punishment, and strengthen the deterrent effect.
-Adhere to the principle of rule of law. Follow the principles of openness, fairness, and impartiality, adhere to strict law enforcement, fair justice, unify standards and standard procedures, improve professionalism, enhance transparency, and continuously enhance credibility.
——Insist on overall planning and coordination. Strengthen the coordination of work between securities and futures supervision and management agencies, public security, judicial, market supervision and other departments and relevant localities, and form a joint force to effectively crack down on illegal securities activities.
——Insist on bottom line thinking. Combining the strict crackdown on securities illegal activities in accordance with the law with the effective prevention and resolution of risks, the maintenance of national security and social stability, the strengthening of risk investigation in key areas, strengthening the prevention and control of source risks, and strictly preventing risks from superimposed resonance and amplification.
(3) Main goals. By 2022, important progress has been made in the construction of the legal liability system for illegal and criminal activities in the capital market. The law enforcement and judicial system and coordination and cooperation mechanisms for strictly cracking down on illegal activities in securities have been initially established. The cost of illegal and criminal securities has increased significantly, and major illegal and criminal cases have occurred frequently. Effective containment, investor rights relief channels have been smoother, and the order of the capital market has improved significantly. By 2025, the capital market legal system will be more scientific and complete, the securities law enforcement judicial system with Chinese characteristics will be more complete, the judicial transparency, standardization and credibility of securities law enforcement will be significantly improved, the administrative law enforcement and criminal justice will be efficiently and smoothly connected, and the law and trustworthy, standardized and transparent, and open An inclusive and good capital market ecology has taken shape in an all-round way.
2. Improving the legal liability system for violations and crimes in the capital market
(4) Improve the securities legislation mechanism. Make full use of legal amendments, legal interpretations, authorization decisions and other forms to improve the efficiency of legislation in the securities field and enhance the timeliness of legal supply.
(5) Intensify criminal punishment. Implement the Criminal Law Amendment (11), simultaneously revise the standards for filing and prosecution of relevant criminal cases, and improve relevant criminal judicial interpretations and judicial policies.
(6) Improve the administrative legal system. Implement the newly revised Securities Law, speed up the formulation and revision of listed company supervision and management regulations, securities company supervision and management regulations, the new third board market supervision and management regulations, and securities and futures administrative enforcement measures for the implementation of party commitments and other supporting laws and regulations to greatly increase the cost of violations. Speed up the formulation of the futures law to make up for the shortcomings of the futures market supervision and enforcement system.
(7) Improve the civil compensation system. Promptly promote the implementation of the representative litigation system for securities disputes. Revise the judicial interpretation of civil compensation caused by misrepresentation, and cancel the pre-procedure for civil compensation litigation. Carry out pilot programs for the securities industry arbitration system.
(8) Strengthen the market restraint mechanism. Promote the reform of the delisting system, strengthen the delisting supervision, strictly implement the mandatory delisting system, study and improve the supervision and risk disposal system of delisted companies, and improve the virtuous cycle mechanism of the survival of the fittest by listed companies. Strengthen the supervision of the issuance and operation of securities investment funds, implement market withdrawals for fund managers who have seriously violated laws and regulations, and do a good job in risk management to protect the legitimate interests of fund holders. Improve the self-discipline supervision system of trading venues, industry associations, etc. against violations of securities laws and regulations.
3. Establish and improve the law enforcement judicial system and mechanism to strictly crack down on securities illegal activities in accordance with the law
(9) Establish a coordination work mechanism for cracking down on illegal activities in the capital market. Establish a coordination work group to combat illegal activities in the capital market, increase coordination on major cases, improve the information sharing mechanism, promote the formulation of important rules, and coordinate the resolution of major issues.
(10) Improve the investigation system and mechanism of securities cases. Further utilize the institutional advantages of the Securities Crime Investigation Bureau of the Ministry of Public Security stationed in the China Securities Regulatory Commission, and improve the administrative and criminal law enforcement coordination mechanisms in the areas of clue research and judgment, data sharing, intelligence guided investigation, and coordinated case handling. Further optimize the allocation of resources for the Ministry of Public Security’s securities crime investigation establishment and strengthen the construction of front-line investigation forces.
(11) Improve the procuratorial system and mechanism of securities cases. According to the number of cases and staffing, we will study the establishment of a financial crime case handling team within the procuratorial organ. Explore the establishment of a procuratorial work mechanism in the China Securities Regulatory Commission, and strengthen the coordination of the Supreme People’s Procuratorate, the China Securities Regulatory Commission, and the Ministry of Public Security by participating in case clue consultations, research and judgment, and crime prevention. Strengthen the professional construction of procuratorial teams in the securities field. When a suspected major criminal case is transferred to the public security organ, a copy shall be sent to the procuratorial organ at the same time.
(12) Improve the trial system and mechanism of securities cases. Make full use of existing trial resources, strengthen the construction of financial trial work in the locations where securities trading venues such as Beijing and Shenzhen are located, and explore the overall planning of the jurisdiction and trial of criminal, administrative, and civil cases in the securities and futures field. Deepen the reform of the professionalization of financial adjudication, and strengthen the professional construction of the financial adjudication team. Implement the jurisdiction of the first instance of securities crimes handled by the intermediate courts and the procuratorates at the same level. Increase the enforcement of administrative penalties and judicial judgments. Establish an expert consultation system and a special mechanism for professionals to serve as people’s jurors.
(13) Strengthen the construction of case handling and trial bases. Set up securities crime case handling and trial bases in public security organs, procuratorial organs, and judicial organs in some prefectures and cities such as where securities trading venues and futures exchanges are located. Strengthen the placement of cases in the securities crime case base, and the corresponding prosecutors and courts are respectively responsible for initiating public prosecutions and trials, and by means of jurisdiction or designated jurisdiction of the crime location, appropriate centralized jurisdiction over securities crime cases in accordance with the law.
(14) Strengthen local territorial responsibilities. Strengthen information exchange and law enforcement cooperation between the China Securities Regulatory Commission and local governments and relevant departments, study the establishment of an internal notification system for major violations of the capital market, effectively prevent and restrain resistance and interference such as local protection that may be encountered in case handling, and promote efficient investigation and handling case. On the premise that financial management is mainly the central authority, strengthen the responsibility of territorial risk disposal. Local governments must standardize various regional trading venues, crack down on various illegal securities and futures activities in accordance with the law, do a good job in the prevention and disposal of regional financial risks, and maintain social stability.
4. Strengthen the punishment of major securities violations and criminal cases and law enforcement in key areas
(15) Strictly investigate and deal with major and important cases in accordance with the law. Adhere to classified supervision and precise strikes, and comprehensively improve the quality and efficiency of investigation and handling of major securities violations. Strictly and promptly in accordance with the law, re-investigate and punish major illegal cases such as fraudulent issuance, false statements, market manipulation, insider trading, trading using undisclosed information, and fabricating and disseminating false information. For behaviors that seriously infringe the interests of listed companies, such as capital occupation and illegal guarantees, it is necessary to strictly investigate and recover in accordance with the law, and rectify within a time limit. Intensify the accountability of securities issuers’ controlling shareholders, actual controllers, directors, supervisors, senior managers and other relevant persons responsible for securities violations. Strengthen the supervision of intermediary institutions. If there are securities violations, the institutions and their practitioners shall be seriously held accountable in accordance with the law, and severe penalties shall be imposed on illegal activities such as participating in and assisting in financial fraud. Accelerate the investigation, punishment and transfer of related cases. Strictly control the application of probation in accordance with the law.
(16) Severely crack down on illegal securities activities in accordance with the law. Strengthen the coordination of market supervision, public security and other departments with the China Securities Regulatory Commission, improve the cross-departmental coordination mechanism, resolutely ban illegal securities business institutions, resolutely clean up illegal securities businesses, and resolutely crack down on illegal securities investment consulting activities. Strengthen the monitoring of off-site fund allocation, and resolutely crack down on large-scale and systematic off-site fund allocation activities in accordance with the law. Strictly check the legitimacy of the source of funds for securities investment and strictly control the leverage ratio. Strengthen the connection between administrative handling of cases involving local trading venues and judicial trials to effectively prevent regional financial risks.
(17) Strengthen unified law enforcement in the bond market. Strengthen the unified law enforcement of various illegal acts in the bond market, focusing on cracking down on illegal acts such as fraudulent bond issuance, fraudulent information disclosure, and failure of intermediary agencies to perform due diligence. Continuously optimize the bond market supervision and coordination mechanism.
(18) Strengthen the legal liability for illegal acts of private equity. Intensify criminal crackdowns on illegal fund-raising in the private equity field, private equity fund managers and their practitioners’ embezzlement or misappropriation of fund assets. Speed up the formulation of interim regulations on the management of private equity investment funds, and implement differentiated supervision and industry self-discipline for venture capital enterprises and venture capital management enterprises.
5. Further strengthen judicial cooperation in cross-border supervision and law enforcement
(19) Strengthen cross-border supervision cooperation. Improve data security, cross-border data flow, confidential information management and other relevant laws and regulations. Efforts will be made to revise the regulations on strengthening the confidentiality and file management related to the issuance and listing of securities overseas, and to compact the main responsibility of information security of overseas listed companies. Strengthen the standardized management of cross-border information provision mechanisms and procedures. Adhere to the principles of law and reciprocity, and further deepen cooperation in cross-border audit supervision. Explore effective ways and methods to strengthen international securities law enforcement cooperation, actively participate in international financial governance, and promote the establishment of law enforcement alliances to combat cross-border securities violations and crimes.
(20) Strengthen the supervision of China’s concept stocks. Effective measures will be taken to deal with risks and emergencies of Chinese concept stock companies, and promote the construction of relevant regulatory systems. Amend the special regulations of the State Council on the overseas stock raising and listing of joint stock companies, clarify the responsibilities of domestic industry supervisors and regulatory authorities, and strengthen cross-departmental regulatory coordination.
(21) Establish and improve the system of extraterritorial application of capital market laws. Efforts should be made to formulate judicial interpretations and supporting rules for the relevant extraterritorial provisions of the Securities Law, refine the specific conditions for the extraterritorial application of the law, and clarify matters such as law enforcement procedures and the effectiveness of evidence. Strengthen foreign-related trials in the capital market, and promote the mutual recognition and enforcement of judicial judgments between foreign countries and regions and my country.
6. Focus on improving the judicial capacity and professional level of securities law enforcement
(22) Enhance securities law enforcement capabilities. Strengthen securities law enforcement, optimize the establishment of securities inspection and law enforcement agencies, and promote the improvement of securities law enforcement systems and mechanisms with Chinese characteristics that meet the needs of capital market development. Give full play to the function of the party’s commitment system in the administrative enforcement of securities and futures. Improve the reward system for reporting illegal clues in securities, and strengthen the construction of a platform for accepting reports on illegal clues.
(23) Enriching securities law enforcement methods. Effectively use big data, artificial intelligence, blockchain and other technologies to establish a securities and futures market monitoring and early warning system, build a new modern regulatory law enforcement model supported by technology, improve the effectiveness of regulatory law enforcement, and strengthen the investigation and early warning of serious violations of the law. Effective prevention, timely detection, and precise strikes.
(Twenty-four) Strict law enforcement and fair justice. Firmly establish awareness of powers and responsibilities, awareness of evidence, and procedural awareness, and effectively enhance the professionalism, standardization, authority, and credibility of law enforcement and justice. Strengthen unified law enforcement, formulate benchmarks for administrative penalties, and standardize law enforcement. Give full play to the role of reconsideration supervision, litigation supervision and procuratorial supervision, strengthen the regulation and supervision of regulatory law enforcement agencies, resolutely correct irregularities in law enforcement and judicial work, and create a fair and just legal environment for the development of the capital market.
7. Strengthening the construction of the capital market credit system
(Twenty-five) Consolidate the foundation of the capital market’s integrity building system. In the relevant laws and regulations, special provisions have been added for integrity building, the responsibility system of the capital market integrity record main body has been established, the integrity conditions, obligations and responsibilities of market participants have been clarified, and the capital market untrustworthy punishment and trustworthy incentives shall be carried out in accordance with laws and regulations.
(26) Establish a sound credit commitment system. Establish a credit commitment system for administrative licensing in the capital market, and clarify the scope of applicable subjects and licensing matters. Incorporate credit commitments and their performance into credit records as an important basis for supervision during and after the event. The relevant administrative license shall be revoked in accordance with the law for parties who seriously violate their promises.
(27) Strengthen the supervision of the integrity of the capital market. Establish and complete a unified national capital market integrity file to comprehensively record the integrity information of capital market participants. Improve the integrity information sharing mechanism, and increase the intensity of information collection, inquiry, and publicity. Incorporate relevant information into the national credit information sharing platform and the “Credit China” website to form a capital market integrity construction pattern in which all parties jointly build, govern and share.
8. Strengthening organizational guarantees and supervision and accountability
(28) Strengthen organization and leadership. All regions and departments must attach great importance to capital market law enforcement and judicial work, effectively unify thinking and actions into the decision-making and deployment of the Party Central Committee and the State Council, clarify the division of responsibilities, strengthen work coordination, implement work responsibilities, and ensure that various tasks are implemented.
(Twenty-nine) Strengthen the guidance of public opinion. Do a good job in the news and public opinion work to combat securities illegal activities in a three-dimensional manner, strengthen law enforcement propaganda on key cases through multiple channels and platforms, give full play to the warning and education role of the investigation and handling of typical cases, send a clear signal of zero tolerance to the market, and promote the formation of a good law and trustworthiness Capital market ecology.
(30) Strengthen supervision and accountability. Adhere to strict governance of the party in an all-round way, and resolutely implement the requirements for deepening anti-corruption work in the financial sector. Law enforcement and judicial organs and disciplinary inspection and supervision organs coordinated to promote risk management and anti-corruption work in the financial field, resolutely investigate and deal with various corruption issues behind financial risks, and at the same time pay attention to preventing capital market risks that may be induced by corruption cases. Prioritize the investigation and handling of cases that may affect the process of major reforms in the capital market and may cause systemic risks, as well as cases involving internal and external linkages between supervisory staff and market personnel. Strictly regulate the work of the staff of the securities supervision and management agency to take up positions in enterprises or other profit-making organizations directly related to the original work and business in accordance with the law. Those who do not strictly enforce laws and regulations, fail to report clues, fail to establish a case, fail to investigate and deal with it, or interfere with the normal investigation of the case, shall be held accountable in accordance with regulations, disciplines and laws.
.