On June 7, the China Securities Regulatory Commission (CSRC) stated that in order to further standardize the discretion of administrative penalties imposed by the China Securities Regulatory Commission and its dispatched agencies, unify the scale of law enforcement, enhance the openness of discretion, and achieve discretionary fairness, the China Securities Regulatory Commission has researched and formulated the Basic Rules for the Discretion of Administrative Penalties of the China Securities Regulatory Commission (Draft for Comments).

The China Securities Regulatory Commission (CSRC) has divided into six levels of discretion in administrative penalties to severely punish behaviors that seriously harm the rights and interests of investors. So, what behaviors will be punished heavily? What kind of acts can be mitigated or mitigated? Jingtai interprets it for you.

Divide into 6 levels of discretion for administrative punishments

There are a total of 26 articles in the Basic Rules for Discretion, which mainly clarify the basic requirements, order of discretion and discretionary circumstances of administrative punishment, and clarify the relevant rules for discretion in light of the actual situation of administrative punishment.

Specifically, the first is to clarify the basic requirements for the discretion of administrative punishments. Clarify the purpose and basis for formulating administrative punishment discretion, the definition of administrative punishment discretion, and the guiding principles and discretionary policies that should be followed in the exercise of discretionary power.

The second is to clarify the order of discretion and the circumstances of discretion. It stipulates that the discretion of administrative punishment is divided into discretionary orders such as no punishment, exemption from punishment, commutation of punishment, lighter punishment, ordinary punishment, and heavier punishment, clarifying their meaning and classification methods, and separately providing for the applicable circumstances of no punishment, exemption from punishment, commutation of punishment, lighter punishment, and heavier punishment. Where parties have mitigating, mitigating, or aggravating circumstances at the same time, it is provided that punishment shall be given after comprehensive consideration in light of the specific circumstances of the case.

The third is to clarify the relevant rules of discretion in light of the actual administrative penalties imposed by the China Securities Regulatory Commission. These include rules for confiscation of illegal gains, rules for punishment of joint offenders, and rules for punishment of the person in charge and other persons directly responsible for the unit.

With regard to the number of acts and the number of punishments, the basic rules of "one administrative penalty for one violation" and "no two fines for one violation" have been clarified. With regard to the application of the old and new laws, the basic rules of "treating the old with light" and "applying the new law to illegal acts beyond the old and new laws" have been clarified.

Combined with the "Administrative Punishment Law" and other laws and regulations, and the "Opinions of the State Council" and other documents, the basic requirements for promoting "three-dimensional accountability" and "execution linkage" are clarified, and the China Securities Regulatory Commission is clear to supervise and guide the exercise of punishment power by dispatched agencies.

Circumstances that may lead to financial risks will be subject to heavier penalties

The Basic Rules of Discretion specify that the order of punishment shall be mitigated by a fine of less than the statutory minimum fine amount (except where there is no statutory minimum fine amount) and less than 30% of the statutory maximum fine amount.

For the general penalty level, a fine of more than 30% and less than 60% of the statutory maximum fine amount will be imposed.

In the order of heavier punishment, fines are to be imposed at 60% or more of the statutory maximum fine amount and below the statutory maximum fine amount.

Where administrative punishments such as prohibiting entry into the securities or futures markets, suspending or revoking relevant business permits, or imposing fines of less than the equivalent value of securities trading shall be adopted in accordance with law, the order of discretion shall be divided with reference to the principles provided for in the preceding paragraph.

The violation is minor and corrected in a timely manner, and no harmful consequences have been caused; The parties have sufficient evidence to prove that there is no subjective fault; Where the statute of limitations for administrative punishments is exceeded, punishment may not be given, and where the first violation is made and the harmful consequences are minor and promptly corrected, punishment may not be given. Where the violating entity is eliminated, punishment is waived. The subject of the violation eliminated is the unit, and the person in charge and other persons directly responsible for the illegal act continue to bear administrative legal responsibility.

and there are serious violations of the principle of openness, fairness and justice in the market, affecting the order and stability of the capital market, which may cause financial risks and seriously endanger financial security; Seriously harming the rights and interests of investors and traders in the capital market, and having a bad impact; Matters related to the illegal conduct involve bribery by the parties; beating, besieging, pushing, or scratching law enforcement personnel, causing personal harm to law enforcement personnel, or restricting the personal freedom of law enforcement personnel; destroying, falsifying, or tampering with evidentiary materials; transferring, selling, destroying, or concealing funds or assets involved in the case that have been frozen, sealed, seized, or sealed in accordance with law; Where, within 5 years of receiving an administrative punishment or criminal punishment for securities or futures violations, the same type of illegal conduct is committed again, and other circumstances, a heavier punishment is given.

For violations that last for a long time, involve a wide range of areas, and cause greater harm to society; The subjective fault is greater; insulting or abusing law enforcement officials; snatching or damaging law enforcement equipment and personal belongings of law enforcement personnel; snatching and concealing evidentiary materials; Failure to submit documents and materials as required, without justifiable reasons; Those who do not cooperate with law enforcement personnel's questioning, such as evading shirk, refusing to accept, or leaving without reason, or intentionally provide false statements or falsely report the circumstances of the case during questioning, may be given a heavier punishment.

Cooperate with the investigation and punishment of major meritorious service and may reduce the punishment

The Basic Rules on Discretion also provide for mitigating circumstances.

For example, take the initiative to take remedial measures to eliminate the harmful consequences of illegal acts; being seriously coerced or seriously induced by others to commit illegal acts; The directly responsible managers and other directly responsible personnel of the unit's violations of the law take the initiative to report the unit's illegal conduct before the case occurs, and actively cooperate with the investigation and handling; Cooperate with the investigation and punishment of illegal acts, have major meritorious service, etc.

In the case of mitigating punishment, there is an active reduction of the harmful consequences of the violation; being coerced or tricked by others to commit an illegal act; voluntarily confessing illegal acts that have not yet been grasped by supervision; Cooperate with the investigation and punishment of illegal acts, have meritorious service, etc.

The circumstances in which the punishment can be mitigated may have little impact on the order of the capital market; Less damage to the rights and interests of investors and traders in the capital market; Subjective fault is less; Truthfully state and actively cooperate with the investigation; There are no objections to the facts of the violation, and they sign a plea affidavit, etc.

If there are any of the four types of circumstances, punishment may not be imposed

The Basic Rules of Discretion make it clear that punishment may not be imposed in four categories of circumstances, including where there is sufficient evidence to prove that there is no subjective fault.

First, the violation was minor and corrected in a timely manner, and did not cause harmful consequences. Second, the parties have evidence sufficient to prove that there is no subjective fault, except as otherwise provided by laws and administrative regulations. Third, the statute of limitations for administrative punishment has been exceeded. Fourth, other situations where punishment is not to be given in accordance with law.

The Rules further point out that if a person violates the law for the first time and the harmful consequences are minor and corrected in a timely manner, he may not be punished.

In addition, the Rules show that if the offender is eliminated, the penalty can be waived. The Rules explain that the subject of the illegal act is the unit, and the person in charge and other persons directly responsible for the illegal act continue to bear administrative legal responsibility.