China’s securities regulator announced on Friday its intention to impose stricter penalties on fraudulent listings, accounting scams, and misappropriation of funds by major shareholders, aiming to enhance confidence in the stock market.
The China Securities Regulatory Commission (CSRC), in its inaugural news briefing since the appointment of a new chairman, outlined plans to address insider trading and market manipulation with greater precision, aiming to eliminate regulatory blind spots.
The market responded positively to the anticipation of robust measures, with China’s blue-chip CSI300 Index rising for the ninth consecutive session on Friday, marking a 12% rebound from its five-year lows earlier in the month.
In the two weeks since Wu Qing, a seasoned regulator, assumed the role of CSRC chairman, the watchdog has intensified its scrutiny of computer-driven quant trading and imposed penalties for violations of market regulations.
“Punishment will be more and more severe, and the cost of law-breaking will only be higher and higher,” stated Li Ming, head of the enforcement bureau of the CSRC, during a press conference in Beijing.
“For a market to be prosperous and thriving, the key is to make everyone believe the market is fair and just.”
Yan Bojin, head of the CSRC’s department of public offering supervision, echoed this sentiment, indicating that share issuers would face substantial penalties for accounting fraud, with the regulator planning to conduct more on-site inspections.
Investors are anticipating further announcements from the CSRC in the coming weeks.
The new chairman, Wu, colloquially known as the “broker butcher,” has engaged in a series of seminars with market participants to solicit proposals aimed at revitalising the market.