Since the establishment of the Disciplinary Committee (the Committee) as well as the mechanism of "separating investigation from review" by the Shanghai Stock Exchange (SSE) a year ago, the Committee has given its functions into full play by holding 26 review meetings, carried out 10 communication votings, reviewed 89 disciplinary cases and issued 79 disciplinary opinions involving public censure, criticism notices and trading restrictions. All these efforts have seen positive effects.
According to an SSE official, to further perfect the self-regulation, the SSE, based on the earnest summarization of the Committee's experience in its operation, would study and formulate its review guidelines and explore an electronic process of disciplinary review, with an aim to standardize the disciplinary punishment, improve the disciplinary efficiency and give full play to the Committee.
In July last year, the SSE formulated the "Detailed Rules on Disciplinary Punishment" and set up the Committee to take charge of the review of the disciplinary punishment. Thus, the SSE established the disciplinary mechanism of "separating investigation from review". In other words, the SSE's business departments, including Company Management Department, Membership Department and Market Surveillance Department, are responsible for the investigation of the violations while the Committee takes charge of the review of the relevant disciplinary punishment.
An SSE official noted that the positive effects caused by the implementation of the mechanism of "separating investigation from review" can be embodied in several areas. Firstly, the first-line supervision was strengthened through the mechanism. On the basis of the continuous supervision over the regular violations in the corporate governance and the information disclosure of the listed companies, special attention was paid to and quick responses were made according to actual situation to some typical violations emerging in recent years. Such violations included the illegal shareholding increase and decrease by listed companies' directors, supervisors, senior management and shareholders as well as the illegal warrant trading by investors.
Secondly, the justness was guaranteed by "separating investigation from review". In the first place, the justness of the process was guaranteed through the standardization of the disciplinary process and the mutual cooperation and supervision between the Committee and the business departments. In the second place, the consistency of the disciplinary review criterion was improved. During the review, the Committee generally referred to the previous cases and strived to avoid the discrepancy in the treatment of similar cases. In the third place, the lawful rights and interests of the regulated objects were safeguarded.
Finally, the self-regulation mechanism was perfected through "separating investigation from review". The Committee, a special committee independent of the SSE business departments, is made up of 20 experts specializing in law and accounting from and outside the SSE. Each review meeting will be attended by 5 commissioners, with the decision made collectively. This mode enhanced the supervision and balance within the SSE and materialized the professionalism of the self-regulation. So far, among the 89 disciplinary suggestions proposed by the business departments, 10 have been vetoed or partly vetoed by the Committee due to insufficient