Since 2023, the CSRC has adhered to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, taken the study and implementation of the spirit of the Central Financial Work Conference as a major political task, strengthened political guidance, faithfully performed their duties and responsibilities, rallied the joint efforts of the system, and cracked down on all kinds of violations with "zero tolerance" in accordance with the requirements of "comprehensively strengthening financial supervision", Efforts should be made to ensure that supervision and law enforcement are "long teeth with thorns", have edges and corners, strengthen the foundation, and exercise strict supervision and strict control. Efforts should be made to maintain the smooth operation of the capital market, protect the legitimate rights and interests of investors, and provide a strong legal guarantee for the high-quality development of the capital market.
I Law enforcement in 2023
In 2023, the CSRC will investigate and handle 717 illegal cases of securities and futures, with a year-on-year increase of 19%; 539 administrative penalties were imposed, up 40% year on year, and 1073 persons (families) were subject to punishment, up 43% year on year; 103 people were banned from the market, up 47% year on year; RMB 6.389 billion was confiscated, up 140% year on year; 118 suspected cases and clues of securities and futures crimes were transferred to the public security organs, effectively maintaining the order of the capital market operation, effectively protecting the legitimate rights and interests of investors, and the effectiveness of combating securities and futures violations continued to show, and the "zero tolerance" fight against high pressure situation continued to consolidate.
（ one ） Keep an eye on "Key minority", strive to eradicate fraudulent issuance, financial fraud, etc capital market "Poisonous tumor", promoting the improvement of the quality of listed companies
——Adhere to the principle of "reporting is responsible". For issuers and intermediaries suspected of major violations of laws and regulations, even if they withdraw their application for listing, they should stick to the thorough investigation and eliminate "Declaration of illness" and "illness from the mouth" improve the quality of listed companies from the source. In 2023, four cases of false financial data submitted by issuers at the stage of issuance declaration were investigated and dealt with. Among them, in order to meet the conditions for issuance, the false increase of profits in 2020 accounted for 118%. It was the first case of fraudulent issuance under the registration system that was found and dealt with by the Commission at the stage of issuance declaration, and the company and relevant responsible persons were fined 16.5 million yuan.
——Adhere to systematic governance. Focus on the abuse of accounting policies, large amount of provision for asset impairment adjustment profits and other illegal acts, and seriously investigate and deal with them 32 companies with bad circumstances severely cracked down on illegal acts of financial fraud in the name of impairment. Dig deep into the interest chain of financial fraud. In view of the cross connection of the subjects involved, the high similarity of suppliers and customers, and the cooperation between upstream and downstream in many financial fraud cases, we have made a series of analysis, comprehensively investigated and handled, and effectively purified the ecosystem of listed companies.
—— Adhere to three-dimensional accountability. On the basis of increasing the intensity of administrative punishment, we will comprehensively use various means, such as compulsory delisting, criminal accountability, civil compensation, to comprehensively increase the cost of violations. In 2023, 32 listed companies investigated and dealt with by the Commission have been forced to delist, and 42 related listed companies suspected of committing crimes have been transferred to the public security organ. In the fraudulent issuance case of Zeda Yisheng and Amethyst Storage, the company and the responsible person were fined 142.5 million yuan and 90.71 million yuan respectively by the Commission, and the public security authorities took criminal coercive measures against more than 10 responsible persons. Both companies were forced to delist due to major violations of the law, and investors received more than 1.3 billion yuan in civil compensation, which formed a strong law enforcement deterrent for listed companies that dared to try the law by example.
—— Adhere to accurate accountability. Adhere to the principle of seeking truth from facts, do not waste, do not indulge, do the same for excessive punishment, and increase the punishment The punishment of "chief villain" and "key minority" should be strengthened, and the adverse impact on the company's operation should be minimized. If Ye, the actual controller of the company, instigates the company to engage in fraudulent issuance and information disclosure, we will impose a fine of 14 million yuan on Ye and take lifelong measures to ban access to the securities market. For the case of illegal occupation of guarantee, the responsibilities of listed companies, actual controllers, directors, supervisors and other subjects shall be differentiated and handled in categories to avoid "secondary injury" to the company.
（2） Keep an eye on and do not work diligently and responsibly, and press firmly "Gatekeeper" responsibility, urge and guide intermediary institutions to improve their practice quality
—— insist "Multiple investigations in one case". On the basis of investigating and dealing with illegal information disclosure cases such as fraudulent issuance and financial fraud according to law, comprehensively verify the performance of duties and responsibilities of intermediary institutions involved in the case, and seriously deal with those suspected of illegal crimes without condoning. For example, the whole chain crackdown on private network communication series cases, Zixin Pharmaceutical's financial fraud case and other intermediary institutions involved in the case of illegal and irresponsible acts, and the recommendation, audit, legal and other intermediary institutions related to Gome's fraudulent issuance case are also held accountable.
—— insist "Double penalty system". We will severely punish intermediary agencies that fail to perform their duties and responsibilities, and punish institutions and personnel according to law "Double punishment". In 2023, 25 intermediaries and 94 employees will be subject to administrative penalties. In addition to applying "property punishment" according to law, make full use of legal empowerment to explore the application of "qualification punishment". If Zhongtian Huamao Certified Public Accountants fails to perform their duties diligently in the audit practice of Dongfang Wangli's annual report, the business income will be confiscated and a fine of five times will be imposed, and the securities service business will be suspended for six months; Sun, the project leader of Guohai Securities who failed to provide services for Shengtong Group to issue corporate bonds diligently and dutifully, was banned from entering the securities market for five years.
（3） Keep an eye on "Internal and external collusion", "self theft" and "recidivism", maintain a high-pressure law enforcement posture against illegal share reduction, market manipulation and insider trading, and actively create a fair, transparent and predictable trading environment
—— Strictly investigate illegal share reduction. Focus on the illegal share reduction of major shareholders, especially controlling shareholders and actual controllers, and resolutely investigate and deal with it 9 cases of illegal share reduction. Among them, the actual controller of CNNC Titanium Dioxide, together with CITIC Securities, CITIC Securities and Haitong Securities, conspired to use securities lending and derivatives tools to reduce their holdings by detours, strengthen penetrating supervision, and in accordance with the principle of substance over form, it was legally recognized that relevant units and individuals jointly constituted restricted period transactions, with a total of RMB 235 million fines and confiscations.
—— Strictly crack down on collusion and manipulation of stock prices. The actual controllers of some listed companies, directors, supervisors and senior executives shall be severely punished in accordance with the law for taking advantage of capital, shareholding, information and other advantages to manipulate the market in the name of market value management. In 2023, nine cases of actual controllers and executives of listed companies colluding with hot money inside and outside the company to manipulate the company's share price were investigated and handled, and the relevant responsible units and personnel in the cases of Jintuo Shares, Senyuan Electric, New American Star, etc. were fined 660 million yuan, 610 million yuan and 95.67 million yuan respectively.
—— The repeated criminals who manipulate the market will be severely punished. The individual lawbreakers who have been repeatedly punished for market manipulation but have not yet stopped shall be severely punished according to law. For example, Wang's copper gang manipulates back and forth Seven stocks were fined 1.5 billion yuan and transferred to the public security organ for criminal responsibility; If a gang manipulates a lot of stocks, lasts for a long time and involves a large amount of money, and commits another crime after being punished by the Commission for three times, the Commission will impose a fine of 297 million yuan and take lifelong measures to ban access to the securities market.
—— We will investigate and handle new types of illegal cases. We will use data analysis to crack down on new types of illegal acts in the capital market that are constantly changing and upgrading in accordance with the law, and resolutely curb the spread momentum. For example, some groups were investigated and dealt with according to the law to amplify the manipulation gains by using financial derivatives such as OTC individual stock options, and some people Illegal acts of manipulation of LOF funds, convertible bonds and other varieties. Actively cooperate with the public security organs to investigate and deal with illegal market manipulation behaviors that illegal gangs use remote control software to hide transaction traces, quickly sell and liquidate the goods, and seek huge illegal interests.
—— Insider trading of key personnel shall be strictly investigated and dealt with. There are controlling shareholders, actual controllers, directors, supervisors and senior executives of listed companies or acquirers of listed companies, and counterparties of major asset restructuring transactions of listed companies. They put professional ethics behind them and use their identities to access insider information, "Self theft" for their own illegal profits, must be severely punished. For example, Zhang Mou, chairman of the board of directors of Logos Technologies, issued a fine of more than 65 million yuan for every insider trading of the company's shares, and took lifelong measures to ban access to the securities market; More than 50 million yuan was fined and confiscated for insider trading conducted by Huang, the director of Sotone Development's acquisition of the counterparty. In addition, we will also take serious responsibility for a series of cases involving the use of insider information by public officials to trade "Three Gorges Water Conservancy", "East China Science and Technology" and other cases.
（4） Keep an eye on bonds, private placement, futures and other fields, resolutely show the sword to illegal acts, and leave no hidden corner or dead corner of financial supervision and law enforcement
—— We will resolutely crack down on violations of laws and regulations in the bond market. We will seriously investigate and deal with illegal information disclosure and misappropriation of funds hidden behind bond defaults. In 2023, 8 illegal cases of bonds were handled, involving 4 cases of exchanges and 4 cases of inter-bank bond markets. If Evergrande Real Estate confirms the real estate sales revenue in advance, falsely increases the revenue and profits in 2019 and 2020, resulting in fraudulent issuance of five corporate bonds, it is proposed to impose a fine of more than 4.2 billion yuan on the company and relevant responsible persons. If the mortgaged property disclosed by Yuangao Industrial is seriously inconsistent with the mortgage registration, and fails to disclose the bankruptcy application information to the court and the default of relevant bonds in time, the company and relevant responsible persons will be fined a total of 16 million yuan.
—— Strengthen the enforcement of private placement and futures violations. In 2023, 29 private placement and futures cases were handled, and the types of violations included misappropriation of fund property, violation of investor suitability system, violation of promised earnings, violation of investment operations, and failure to disclose information as required. Focusing on relevant risk related cases, for example, 8 private equity institutions controlled multiple private equity institutions to invest in each other through covert ways such as equity holding, fabricated underlying objects and valuations, involving thousands of investors, and misappropriated private equity fund assets amounting to more than 10 billion yuan. A futures company failed to perform its management responsibilities for its subsidiary, failed to submit information truthfully, accurately and completely, and was suspected of engaging in illegal financial activities. We will promptly file and investigate the above cases.
—— Strictly crack down on employees' illegal behaviors. Strengthen the management of employees and deal with violations of laws and regulations "Fight when you show up", and strictly hold accountable the institutions with weak control. It handled 61 cases of violation of laws and regulations by practitioners, including illegal trading of stocks, accepting clients' entrustment privately, fund practitioners trading with non-public information and other illegal types. For example, some employees of China Merchants Securities were intensively investigated for illegal acts such as buying and selling stocks, and 63 people were given administrative penalties, totaling 81.73 million yuan, and one person was banned from entering the securities market for life.
II Priorities of law enforcement in 2024
In 2024, the CSRC will adhere to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, fully implement the spirit of the 20th National Congress of the Communist Party of China and the Central Financial Work Conference, thoroughly implement the "Opinions of the State Council on Strengthening Supervision and Risk Prevention to Promote the High Quality Development of the Capital Market", and strictly crack down on those who seriously endanger the smooth operation of the market and infringe on the legitimate rights and interests of investors Illegal acts in the securities and futures market that have a bad social impact and have strong public reaction are escorting the construction of a safe, standardized, transparent, open, dynamic and resilient capital market.
First, strengthen clue discovery. We will increase the application of scientific and technological supervision, constantly improve the sensitivity and accuracy of clue discovery, strengthen cross sectoral and cross sectoral and cross market supervision cooperation, strengthen the linkage between on-site supervision and off-site supervision, information disclosure and transaction supervision, on-site inspection and investigation, and resolutely eliminate regulatory gaps and blind spots.
The second is to strictly investigate major cases. Focus on combating illegal behaviors such as fraudulent issuance, financial fraud, occupation of guarantees, illegal share reduction, closely monitor and severely crack down on illegal behaviors such as market manipulation and insider trading that affect the normal order of the market, and provide an open, fair and just market order for investors to enter the market.
Third, improve the efficiency of law enforcement. Strengthen the whole process and cycle management of case handling, strengthen process supervision, dynamic management and control of key links, and effectively improve the quality of investigation and handling. Optimize the allocation of law enforcement forces, through "Joint investigation", "case instead of training", "team leader assistance" and other modes to quickly investigate and deal with major cases.
Fourth, continue to deepen cooperation. Give full play to the advantages of the mechanism of the public security and procuratorial offices and convenient communication, and work together with the public security and procuratorial organs to deploy and supervise the handling of cases. Strengthen the linkage with relevant ministries and local governments in information notification, data sharing, case handling and other aspects, and form a working pattern of performing their own duties, organic convergence, and joint governance.
Fifth, pay attention to both punishment and prevention. Give full play to inspection and law enforcement The functions of "punishment", "governance", "prevention" and "education" make those who challenge the bottom line of the law pay their due price, and promote reform and management with punishment, so as to achieve the conservation and restoration of the market ecology. Improve the transparency of law enforcement, timely report the handling of financial fraud, market manipulation and other cases and typical cases, and achieve the effect of "handling one case, educating one case, warning one party".
