On June 15, 2021, the China Securities Regulatory Commission announced the new "Regulations on Prohibition of Access to the Securities Market" (hereinafter referred to as the new regulations), which will come into effect on July 19, 2021. The Securities Market Prohibition Regulations (hereinafter referred to as the original regulations) promulgated in 2006 and revised in 2015 will be repealed on the same day when the new regulations are implemented.
The full text of the new regulations has been expanded from the original 13 articles to 17 articles, and 4 new articles are added. Only 2 of the original 13 articles have not been modified, and more than half of the remaining 11 articles Significant revisions have been made (a comparison table of old and new regulations is attached at the end of the article).
The new regulations, as an important basic system of the legal liability system for violations and crimes in the capital market, fully implement the nine-character policy of "establishing a system, non-intervention, and zero tolerance" for securities supervision, and compare it with the new "Securities Law." , The relevant provisions of the new "Administrative Punishment Law", in terms of the legislative basis, the subject of law enforcement, the object of supervision, the type and content of prohibited acts, the criterion of discretion, the due administrative More than ten aspects including the coordination of criminal liability, the establishment of a "securities market integrity archives" system, a clear definition of related legal concepts, and the application of the principle of excessive convergence between the old and new laws have made substantial reforms to the securities market prohibition system. The following contents of this article give a comprehensive interpretation of the new regulations from 14 aspects:
1. Improve the new legislation basis and implement the new law requirements in a supporting manner
The original regulations The legislative basis is only based on the "Securities Law of the People's Republic of China", and the new regulations include the "Securities Investment Fund Law of the People's Republic of China" and the "Administrative Punishment Law of the People's Republic of China" as new legislative basis into Article 1 of the new law , Clarified the nature of administrative penalties for prohibited acts in the securities market, expanded the scope of adjustment of legal relations prohibited from entering the securities market, and explicitly included public offerings and private placements into the supervision of prohibited access to the securities market for subsequent provisions. New regulations such as "penalties" have been incorporated into new regulations to establish the foundation of higher-level laws.
Second, increase law enforcement entities, and clearly grant law enforcement authority to dispatched agencies
Article 2 of the new regulations clearly gives dispatched agencies of the Securities Regulatory Commission the ability to make market bans The administrative authority of the measures changed the single law enforcement subject of the China Securities Regulatory Commission in the original regulations into dual law enforcement subjects, and they are collectively referred to as "enforcement units."
3. From the outside to the inside, we will refine and expand the regulatory objects and regulatory bodies in an all-round way. Public and private equity, law firms, and club partners are all clearly written into new regulations and included in the scope of supervision. Achieved full coverage of supervisors
Article 3 of the new regulations fully expands and refines the regulatory objects, which is one of the biggest highlights of the new regulations, which is mainly reflected in the following aspects :
1. Include the originally prescribed listed companies and unlisted public companies into the scope of the definition of securities issuers under the new regulations, and use the definition of securities issuers as the overall package, and include corporate bond issuers and other securities issuers together Included in the scope of this definition has refined and expanded the scope of supervision;
2. Regulate shareholders holding more than 5% of shares and their directors, supervisors, supervisors, and senior executives as supervisors;
3 . Regulate the bond trust manager as the main body side by side with the securities service agency as the object of supervision;
4. The original provisions of “persons engaged in securities service business” are refined into “partners, persons in charge and staff” of securities service institutions, which clarifies the regulatory status of partners of law firms and accounting firms, and the above entities have clearly become Penalties subject to the prohibition measures in the securities market;
5. The refinement clearly stipulates that public funds and private equity funds should be regulated as regulatory objects, and the original provisions of "securities investment fund managers and securities investment fund custodians" have been expanded and refined into two categories. One category is "publicly offered securities investment fund management companies". And its legally established subsidiaries, other public fund managers, fund custodians and their established fund custody departments, fund service institutions", the first category is "private investment fund managers, private investment fund custodians, private investment fund sales Institutions and other private equity service institutions";
6. New Securities ExchangeThe natural person or institutional investor’s transaction decision-maker making the investment shall be regulated as the object of supervision;
7. Relevant responsible personnel who fabricate or disseminate false or misleading information are newly added to be regulated as objects of supervision;
8. The blade is inward-newly added staff of law enforcement units and related self-regulatory organizations are regulated as objects of supervision.
4. Newly banned entry of securities service business, supplemented the banned content of identity category
Article 4, paragraph 1, first of the new regulations According to the provisions of Article 221 of the New Securities Law, the content of the ban on identity-based entry has been improved, and the ban on securities service business and the original provision of the prohibition on securities business have been combined as the two largest members of the ban on identity-based entry. The type should be clarified.
5. Adding a new type of ban on trading in the market
The second paragraph of Article 4 of the new regulation is based on the 200th paragraph of the new securities law. The provisions of Article 21 have added a new type of prohibition "no securities trading in securities exchange venues". Trading prohibition is a different type of prohibition from the traditional identity prohibition. The applicable conditions are clearly stipulated in Article 7, paragraph 2 of the new regulations: "affecting the order of securities market transactions or fairness of transactions", reaching the seriousness of the circumstances. of. At the same time, it is stipulated that the period of prohibition of transactions shall not exceed 5 years.
Article 6 of the new regulations also stipulates exclusions from trading bans. The purpose is to "avoid different regulations overlapping and constraining each other" and "to avoid affecting relevant entities to fulfill their promises, and to fully protect small and medium-sized enterprises. The legitimate rights and interests of investors". [1 ]
VI. Further clarified the discretionary requirements for the determination of the securities market prohibition measures
The original regulations did not identify the securities market prohibition measures The discretionary requirements are clarified. The second paragraph of Article 4 of the new regulations clearly stipulates the discretionary requirements for the determination of the securities market prohibition measures, that is, whether to impose the securities market prohibition penalties and what penalties, law enforcement agencies should mainly consider the following three aspects. : One is the identity and responsibility of the responsible personnel, the other is the type of illegal behavior, and the third is the social harm of the illegal behavior and the severity of the violation.
VII. Clear identity bans and transaction bans can be applied individually or in combination
Article 4, 2 of the new regulations According to the provisions of the paragraph, the ban on identity type and transaction type shall be applied separately or combined by law enforcement units based on the legal elements violated by the illegal act. That is to say, for a certain illegal act, it may lead to double penalties of identity banning and transaction banning.
8. Change the application of "light mitigation punishment" from "may" to "should" to demonstrate the rescue function of administrative punishment education and reduce the administrative discretionary space
The first paragraph of Article 9 of the new regulations gives full play to and implements the educational rescue function of administrative punishment, limits the space for administrative discretion, optimizes and adjusts the circumstances that can be "lightened and mitigated punishment" in the original regulations, and stipulates In order to "should" reduce the punishment, the rights and interests of the offender in the administrative punishment procedure are further protected.
IX. Implement the new administrative penalty law "first violation without penalty" system, and clarify the requirements for "first violation without penalty"
"first violation without penalty" "Punishment" is a new system stipulated in Article 33 of the New Administrative Punishment Law, and the second paragraph of Article 9 of the new regulations implements the requirements of the Administrative Punishment Law on penalties for prohibiting access to the securities market. There are three requirements for determining that no punishment should be imposed. One is that the violation is minor, the other is that it should be corrected in time, and the third is that it has not caused harmful consequences. There are three criteria for determining that "the first violation is not punished" can not be punished. The first is the first violation, the second is the harm and the consequences are minor, and the third is the timely correction. The above-mentioned identification standards are completely consistent with the provisions of the Administrative Penalty Law, which meets the requirement of implementing this article of the Administrative Penalty Law without discount.
X. Incorporate the "China Securities Regulatory Commission Administrative Penalty Hearing Rules" into the new measures to further strengthen the standardization of the due process of hearings and emphasize the application of the principle of case file exclusivity in market prohibition penalties.
The original regulations only stipulated that law enforcement agencies should inform the parties that they have the right to request a hearing, but did not specify the hearing procedures in detail. The new regulations incorporate the “China Securities Regulatory Commission’s Administrative Penalty Hearing Rules” that has been implemented in 2015 into the hearing procedure part of the new regulations, and explicitly incorporate the hearing procedures prohibited from the securities market into the adjustment scope of the above-mentioned hearing rules, which can effectively prevent hearings. The program has gone through the scenes and is not standardized.
It is worth noting that Article 65 of the New Administrative Punishment Law stipulates: After the hearing, the administrative agency shall make a decision in accordance with the transcript of the hearing and in accordance with Article 57 of this law. The content of this clause is a manifestation of the principle of file exclusivity, that is, the principle of file exclusivity is formally written into the new bankPolitical Penalty Law. The "China Securities Regulatory Commission Administrative Penalty Hearing Rules" implemented in 2015 has included the principle of case file exclusivity. Article 23 of the rule stipulates: After the hearing is over, the China Securities Regulatory Commission or its dispatched office shall raise an issue with the parties. The facts, reasons and evidence of the parties shall be reviewed, and if the facts and reasons put forward by the parties are established, they shall be adopted. The China Securities Regulatory Commission or its dispatched agency shall, based on the review of the hearing and the provisions of the "Administrative Punishment Law of the People's Republic of China", make corresponding handling decisions on the parties. That is to say, penalties for prohibiting access to the securities market shall be implemented in accordance with the requirements of the new Administrative Penalty Law and the "China Securities Regulatory Commission Administrative Penalty Hearing Rules".
XI. Refine the use of the court’s effective criminal judicial decision as the basis for the cancellation or change of the securities market prohibition measures
Article 10 of the original regulations The circumstances under which the securities market prohibition measures can be changed and revoked have been stipulated. The new regulations have made more specific provisions on this issue, and the expression "convicted of guilt has been revoked or changed in accordance with the law" is revised to "the effective judicial decision of the people's court is "Revocation or modification" restricts the formal elements of the "conviction of guilt", that is, it can only be an effective judicial decision by the people's court.
12. Strengthen "reputation penalties" and build a disciplinary system for "securities market integrity files"
Public disclosure is not only an internal requirement for open and civilized law enforcement, but also an effective way to devalue and punish offenders. In addition to retaining the content of the original regulations, Article 13 of the new regulations also records the above-mentioned offenders in the "integrity files of those who are identified as prohibited from entering the securities market" instead of entering the "integrity files of the securities market". This shows that the China Securities Regulatory Commission has begun to build a broader and deeper capital market integrity file system, which will have a more extensive and far-reaching impact on the reputation of the punished persons.
13. Clarify the definition of "securities issuer", "credit business", "employees", "immediate" and other legal terms to facilitate strict regulation of law enforcementp>
Article 16 of the new regulations clearly stipulates the above concepts, which fills in the original regulations for the lack of definition of the above concepts and the application of standards in law enforcement is vague and unclear, providing a clear basis for administrative law enforcement.
14. It is clear that the old and lenient principle will be used as the applicable rule for excessive convergence between the old and the new law.
The new regulation will be July 19, 2021 For formal implementation, the new law establishes the principle of applying light from the old to the violations that occurred before the implementation of the new regulations, that is, the law is not retroactive. However, the new regulations apply to regulations that are beneficial to administrative counterparts. For behaviors that were implemented before the implementation of the new law and continued until the implementation of the new law, the new regulations apply.
The new "Securities Market Banned Regulations" have many bright spots. Although only four provisions have been added, the penalties for the ban on securities market The subjects, objects, scope, type, range, administrative procedures, implementation of the new securities law and the new administrative penalty law have all been greatly revised and updated, basically adapting to the new era of the securities market’s ban on penalties at “zero”. The strong regulatory thinking in terms of tolerance has greatly refined and expanded the scope of supervision of securities market practitioners, further strengthened the responsibility of securities market “gatekeepers” of securities intermediaries, especially law firms and accounting firms, and strictly enforced the law by the Securities Regulatory Commission. Established a clearer legal basis.
Source: Lawyer Tian Yuan, author Tian Yuan
Label group:[legal] [Regulations on prohibiting entry into the securities market]