Chinese Financial Regulators Vow Crackdown on Fraud

Source: Regulation Asia Editors, Regulation Asia 2020-07-15

The FSDC set out measures to speed up investigations and criminal prosecutions, increase penalties and civil compensation, and improve stock market delisting mechanisms.

Chines financial regulators have vowed to set up measures to counter securities and accounting fraud in its capital markets.

After a meeting of the FSDC (Financial Stability Development Committee) chaired by Vice Premier Liu He, regulators said they would establish a crime-busting team with relevant agencies to strengthen cooperation.

The FSDC, which oversees China’s banking, securities and insurance regulators, called for “zero tolerance” and a stronger crackdown on fraud, to ward off US legislation that will target Chinese companies whose audits are not subject to sufficient oversight by US agencies.

The FSDC also set out measures to speed up investigations and criminal prosecutions, increase penalties and civil compensation for major crimes, facilitate class-action lawsuits, and improve delisting mechanisms at domestic stock exchanges.

At the meeting, it was decided that the CSRC (China Securities Regulatory Commission) will work with other agencies to set up a team specifically aimed at cracking down on illegal activities in the capital market.

On Friday (10 July), the CSRC imposed underwriting restrictions on GF Securities and punished 14 of its officials for the brokerage firm’s role in a USD 12.6 billion financial fraud at drugmaker Kangmei Pharmaceutical.

FSDC

Chinese Financial Regulators Vow Crackdown on Fraud

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