CSRC Optimises Rules on Administrative Reconciliation

Source: Regulation Asia Lucy Zhang, Regulation Asia 2020-08-16

The revisions will help to ensure investors are compensated for losses in a timely manner and market order is restored as soon as possible, the CSRC says.

The CSRC (China Securities Regulatory Commission) is soliciting comments on revised administrative reconciliation rules for securities and futures firms.

The previous set of rules, set out in Feb 2015, established a pilot system for administrative settlements in the securities and futures sectors for cases of misconduct.

According to the CSRC, the new rules are aimed at optimising the current reconciliation system to facilitate its transition from a pilot to a regular system.

Under the new Securities Law, the CSRC may decide to suspend an investigation of an entity or individual suspected of securities violations if the party under investigation makes a written application undertaking to correct the suspected violations, compensate the investors concerned for their losses, and eliminate the damages or adverse effects within a period approved by the CSRC.

The CSRC may decide to terminate the investigation if the party under investigation fulfills its undertaking.

The revisions to the 2015 pilot system no longer impose special restrictions on the types of cases in scop

e. Previously administrative reconciliation was applicable only to acts of misrepresentation, insider trading, market manipulation and fraud.

Other revisions include improvements in the procedures for initiating administrative settlements, the factors for determining settlement payments, the management and use of administrative settlement payments, and the protection of the rights and interests of the parties.

According to the CSRC, the revisions will ensure the system “further develops the positive role of administrative reconciliation in resolving conflicts between administrative resources and efficiency”.

The revisions will also help to ensure investors are compensated for losses in a timely manner, and market order is restored as soon as possible, the CSRC says.

The consultation, is open for comment until 6 September.

China Securities Regulatory Commission

investment

fraud

Insider Trading

market manipulation

CSRC Optimises Rules on Administrative Reconciliation

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