In a robust effort to safeguard the integrity of its capital markets, Chinese authorities have unveiled a comprehensive framework aimed at curbing financial fraud and strengthening market discipline.
The initiative, released on Friday, is a collaborative effort 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.
The document emphasizes a zero-tolerance policy towards financial irregularities, including the illicit issuance of stocks and bonds, dissemination of false information, misappropriation of funds, and debt evasion. It calls for enhanced review and registration mechanisms for the issuance and listing of securities to prevent fraudulent activities.
Authorities are particularly vigilant against evolving tactics of systemic and organized financial fraud. The framework advocates for stringent legal actions against those involved in forging or altering financial documents, fabricating transactions, or colluding with third parties.
Regulatory oversight is a key focus, with targeted crackdowns on the misuse of accounting policies and financial fraud in specific sectors. A proactive approach to risk assessment is encouraged to identify and mitigate risks associated with industry-specific, systemic, and regional financial fraud.
The framework introduces a comprehensive accountability system, recognizing the adverse impact of financial fraud on market stability and investor confidence. Both primary perpetrators and their accomplices will face increased penalties and potential market bans.
Additionally, the guidelines mandate strict enforcement of delisting for companies involved in fraudulent issuance and severe financial misconduct. There is also an intensified pursuit of criminal accountability for controlling shareholders and actual controllers implicated in financial fraud affecting listed companies.
Investigative efforts will be directed towards uncovering misconduct by corporate insiders, including fund misappropriation, embezzlement, and breaches of trust that undermine the interests of listed companies.
Reference(s):
China beefs up combat against financial fraud in capital markets
cgtn.com
