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China issues draft rules for securities offenses compensation -Breaking

by Mike Robinson

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© Reuters. FILE PHOTO – A Chinese flag is seen flying outside of the China Securities Regulatory Commission’s (CSRC), building at the Financial Street, Beijing. China. July 9, 2021. REUTERS/Tingshu Wang

SHANGHAI, (Reuters) – China’s Securities regulator published Friday draft rules on how penalties for securities fraud offenses are prioritized to compensate civil investors. This is part of a wider push for a U.S.-style system in initial public offerings.

China Securities Regulatory Commission, (CSRC), stated in a statement that a “sound securities civil compensation system” is an essential guarantee for full implementation of registration-based IPO systems.

China wants to shift from its existing IPO system, which is based on regulatory approvals and to a registration based system like those used in the United States. Investors will be more responsible for investing.

China’s January rules made it possible for securities fraud victims to seek compensation. These were introduced to stop corporate corruption and protect investor interests.

The CSRC indicated that they would improve draft rules based off public feedback.

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