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The Shanghai Stock Exchange (the SSE) will further publicize the standards and procedures of disciplinary sanctions, as well as enhance transparency in the frontline regulation.
The SSE will gradually standardize the format of the Letter of Decision on Disciplinary Sanctions, rationalize its content, reinforce its reasoning and demonstration, and strengthen its persuasiveness.
The SSE will disclose the typical cases of disciplinary sanctions in time, in a bid to effectively warn and educate the potential violators of laws and regulations.
The SSE has recently released the “SSE Measures for Implementation of Disciplinary Sanctions and Regulatory Measures” (the “Measures for Implementation” for short), in a bid to meet the requirements of strengthening “in-process and aftermath regulation” and promoting “Openness of Rules, Procedures, and Results”. The next step in the change of self-regulation was also disclosed at the news briefing convened by the SSE on last Friday. An SSE official said that the SSE will continue to improve its disciplinary sanctions mechanism in the three aspects, including further publicizing the standards and procedures of disciplinary sanctions and disclosing the typical cases of disciplinary sanctions in time.
At the news briefing, the SSE reported the effects achieved in the recent 5 years since the adoption of the mechanism of separating investigation from trial on illegal cases. In July 2008, the SSE released the “Detailed Rules on Disciplinary Punishment” and set up the Disciplinary Committee composed of experts both from the SSE and outside of it. In the past 5 years, the Disciplinary Committee convened a total of 54 discussion meetings and carried out 34 times of communication voting to discuss 275 violations of laws and regulations. Moreover, it publicly condemned 30 companies and 140 individuals, criticized 93 companies and 413 individuals, and disqualified 14 individuals from holding positions of directors, supervisors, or senior executives of listed companies within a certain period, apart from taking the measure of trading limitation on 111 securities accounts.
The SSE official also said that through practicing the aforesaid disciplinary sanctions, the SSE has formed a set of stable and mature practices, based on which, it formulated the “Measures for Implementation”, thus laying a solid foundation for meeting the requirements of the “Direct Channel for Information Disclosure” business, and further strengthening the in-process and aftermath regulation.
This official added that next, in the principle of promoting the rule of law and adhering to the guidance of openness, the SSE will continue to improve the disciplinary sanctions mechanism by attaching importance to the following three aspects. First, the SSE will further publicize the standards and procedures of disciplinary sanctions and enhance transparency in the frontline regulation; second, it will gradually standardize the format of the Letter of Decision on Disciplinary Sanctions, rationalize its content, reinforce its reasoning and demonstration, and strengthen its persuasiveness; third, the SSE will disclose the typical cases of disciplinary sanctions in time, in a bid to effectively warn and educate the potential violators of laws and regulations.
At the news briefing, the SSE also reported the law execution of self-regulation in the first half of this year. For the year to date, the SSE has carried out the self-regulation work oriented for the major illegal behaviors in the market, namely, the violations in annual performance predictions, shareholders’ equity change and relevant disclosure, listed companies’ significant transactions, significant issue disclosure, shares transactions of listed companies’ directors, supervisors, and senior executives, and others. The official also emphasized that under the request of the SSE, ST Shanghai Hongsheng Technology Co., Ltd. held a briefing to explain the termination of its significant assets reorganization, which was a significant information disclosure measure against “False Reorganization” or “Insincere Reorganization” for the purpose of protecting the rights and interests of investors. It is also learned that the SSE has reported the relevant issue to the China Securities Regulatory Commission for examination and verification, and it will continue to pay close attention and take follow-up regulatory measures according to the progress in the issue.
Moreover, this official mentioned that measures regarding the following 4 aspects will be taken to further enhance the pertinence, effectiveness, and timeliness of self-regulation in the second half of this year. First, it is emphasized that the person accountable should be made clear to make sure that responsibilities are duly assigned; second, according to the regulation concept of “Loosening Supervision While Tightening Regulation and Strengthening Law Enforcement”, the SSE will further enrich the types of regulatory measures, differentiate violations of laws and regulations, combine the disciplinary sanctions (including public criticism and public condemnation) with the regulatory measures (including ordered participation in training, dismissal from the present position, and deprivation of qualification for the Direct Channel business), with an aim to strengthen the hierarchy, differentiation, and deterrence of law enforcement; third, given the “Measures for Implementation”, on the basis of specified standards, principles, and procedures of sanctions, the SSE will try to set up categorized standards for sanctions in a wider scope, summarize the main characteristics of violations of the same kind, stipulate general sanction standards and less or more rigorous sanctions, aiming to further enhance the fairness in regulation and law enforcement; fourth, the SSE will optimize the procedures of disciplinary sanctions, so as to improve the timeliness of regulation and law enforcement as well as respond quickly to any violations.
