CSRC Issues Implementation Rules for Administrative Penalties in Cases Involving Unlawful Transfers of Securities

Recently, the China Securities Regulatory Commission (CSRC) has issued the Implementation Rules for Administrative Penalties in Cases Involving Unlawful Transfers of Securities (the "Rules"), which will take effect on December 1, 2026.

The Rules mainly cover the following areas. First, they standardize the determination of what constitutes an "unlawful transfer of securities." They clarify the meanings and circumstances of "transfer of securities," "transfer of securities during a restricted transfer period," and "transfer of shares in violation of laws, administrative regulations, or provisions of the securities regulatory authority under the State Council" as provided for in Article 186 of the Securities Law, as well as the circumstances in which persons acting in concert are to be identified as violators. Based on factors such as the nature of the securities, the type of actor involved, the characteristics of the conduct, and the degree of harm caused, the Rules classify unlawful transfers of securities into four categories, including "transfer of securities during a restricted transfer period in violation of law," with a view to ensuring accurate legal characterization and targeted enforcement. Second, the Rules standardize the imposition of penalties for unlawful transfers of securities. They establish differentiated benchmarks for different penalty tiers according to the category of violation, so as to ensure that penalties are commensurate with the violations. The Rules also specify circumstances warranting adjustments to penalties and provide guidance on circumstances involving cumulative penalties or application of the heavier penalty, adjusted application in special cases, and securities market bans.



(Source: https://www.csrc.gov.cn/csrc/c101954/c7665433/content.shtml)

Note: The link to the Chinese official website of the document is for your reference.