In a decisive move to safeguard the integrity of its capital markets, Chinese authorities have unveiled a comprehensive framework aimed at cracking down on financial fraud and reinforcing market discipline.
On Friday, a joint statement was released by the China Securities Regulatory Commission, the Ministry of Public Security, the Ministry of Finance, the People’s Bank of China, the National Administration of Financial Regulation, and the State-owned Assets Supervision and Administration Commission of the State Council. This collaborative effort underscores the country’s commitment to ensuring a fair and transparent financial environment.
The new guidelines call for an unwavering stance against fraudulent activities, particularly the illegal issuance of stocks and bonds. Authorities emphasized the need to rigorously enhance the review and registration mechanisms governing the issuance and listing of securities, aiming to close loopholes that have been exploited by wrongdoers.
A zero-tolerance policy has been adopted towards a range of financial irregularities, including the dissemination of false information, misappropriation of funds, and evasion of debt obligations. The document highlights the evolving tactics of systemic and organized financial fraud, urging vigilance and advocating for stringent legal actions against those involved in forging documents, fabricating transactions, or colluding with third parties.
Regulatory oversight is set to intensify, with a focus on the misuse of accounting policies and targeted crackdowns on financial fraud in specific sectors. The authorities are advocating for a proactive approach to risk assessment, aiming to identify and mitigate risks associated with industry-specific, systemic, and regional financial fraud.
The framework introduces a comprehensive accountability system that recognizes the disruptive impact of financial fraud on market order and investor confidence. It insists on holding both the primary perpetrators and their accomplices accountable, advocating for increased penalties and market bans for those found guilty.
Furthermore, the guidelines call for the strict enforcement of mandatory delisting procedures for companies involved in fraudulent issuance and serious financial fraud. There is also a push to intensify the pursuit of criminal accountability for controlling shareholders and actual controllers who may be involved in fraudulent activities and the encroachment upon listed companies’ assets.
Investigative efforts will be directed toward uncovering misconduct by corporate insiders, including the misappropriation of funds, embezzlement, and breaches of trust that harm the interests of listed companies. By holding individuals and entities accountable, the authorities aim to restore investor confidence and ensure the healthy development of China’s capital markets.
This concerted effort reflects China’s broader commitment to economic stability and integrity, sending a clear message to markets both domestically and internationally that financial misconduct will not be tolerated.
Reference(s):
China beefs up combat against financial fraud in capital markets
cgtn.com
