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The Amendment (XI) to the Criminal Law of the People’s Republic of China (hereinafter referred to as the Amendment to the Criminal Law) will be officially enforced as of March 1. The introduction of the Amendment to the Criminal Law (the “Amendment”) is another major legislative activity involving the capital market after the revision to the Securities Law, and an important measure to implement President Xi Jinping’s rule of law thought and build a socialist rule of law system with Chinese characteristics. It is of far-reaching significance to further increasing the cost for securities offences, protecting investors’ legitimate rights and interests, steadily advancing the registration-based IPO system reform, forestalling and defusing financial risks, and better ensuring stable and healthy development of the capital market.
To do a good job in the learning, publicity and implementation of the Amendment, SZSE, following the overall plan of China Securities Regulatory Commission (CSRC), recently invited experts in trial practice from Shenzhen Intermediate People’s Court to give lectures on special topics such as the background of legislation and main content of the Amendment and application of law to officials and employees of SZSE, in order to guide them to be fully aware of the significance of the Amendment and correctly understand the revision background and applicable situations of provisions on securities and futures offences, further improving the capability and level of governance based on the rule of law.
The Amendment has significantly intensified the punishment for fraudulent stock issuance and falsification of information and strengthened the criminal accountability of the “critical minority” such as controlling shareholder and de facto controller and the responsibility of sponsors and other intermediaries as “gatekeeper”. In addition, it has further refined the identification of manipulation situations concerning the crime of securities or futures market manipulation, and enhanced the linkage with the Securities Law, forming a three-pronged (securities law, criminal law and administrative regulatory rules) accountability system for securities and futures offences. The Amendment has not only responded to market expectation but also provided strong legal guarantee for the smooth implementation of the registration-based IPO system reform.
SZSE will carry out relevant learning and communication activities in various forms and via multiple channels in combination with such work as advancing the registration-based IPO system reform, improving the quality of listed companies, implementing the reform of the delisting system and optimizing trading regulation, to create a good environment for the enforcement of the Amendment. First, based on existing training forms, SZSE will include important revisions into “Lecture One: Integrity” and the training courses for relevant entities such as de facto controllers, controlling shareholders, board secretaries and independent directors of listed companies. Second, SZSE will strengthen compliance training of members, with a focus on the revisions to provisions on sponsors’ crimes of spreading fraudulent issuance and providing false documentary evidences. Third, based on investor education in the general knowledge of law, SZSE will develop and launch relevant investor education products, and do a good job in educating investors on the latest revisions to provisions on securities and futures offences.
The law should change with time, so the country can be better governed. The Amendment is a clear manifestation of China’s unwavering resolve of adopting a “zero tolerance” attitude toward securities and futures offences. Next, SZSE will study and implement President Xi Jinping’s rule of law thought with depth and earnestly practice the principles of “system building, non-intervention, and zero tolerance”. SZSE will, according to CSRC’s plans and requirements, fully leverage its frontline regulation advantage in a timely, efficient and flexible way and actively cooperate with CSRC, public security organs, procuratorial organs, people’s courts and other relevant departments to handle capital market offences seriously. SZSE will continue to consolidate the achievements of the ChiNext Board and registration-based IPO system reform, energize market entities, improve the market ecology, and maintain market order, striving to build a standard, transparent, open, dynamic, and resilient capital market.
