Implementing The Requirement Of "Zero Tolerance" In The 69Th Issue Of The Supervision

? ? ? The operation mechanism of the capital market is complex, the stakeholders are strong, and the attention of all parties in the market is high. Cracking down on illegal securities activities in accordance with the law is an important guarantee for maintaining the order of the capital market and effectively playing the hub function of the capital market. With the implementation of the new securities law, the reform of the registration system with information disclosure as the core is advancing steadily, and profound structural changes are taking place in the capital market. Higher requirements are put forward for the listed companies to abide by the law and keep their faith, to be diligent and responsible for the "key minority", to strengthen the front-line supervision of regulatory agencies, and to strengthen the construction of law enforcement and punishment ability and work level.

The "key minority" of listed companies, including controlling shareholders, actual controllers, directors and supervisors, is the key to improve the governance of listed companies, improve the quality of listed companies, and build a healthy market ecology. For a long time, the regulatory authorities have maintained a "zero tolerance" high-pressure regulatory situation for major violations, focusing on the responsibility of "key minority" subjects. This is also an important reason for the frequent appearance of "key minority" in recent years, which has aroused market attention and discussion.

Precision attack, focus on "key minority"

? ? ?《 The opinions on cracking down on illegal securities activities in accordance with the law emphasizes the adherence to the "zero tolerance" requirement, clearly requires that classified supervision and precision crackdown be adhered to, and that the controlling shareholders and actual controllers of the issuer, illegal intermediary institutions and their employees should be held accountable.

As a front-line regulatory agency, the disciplinary action is an important starting point for strengthening the supervision in and after the event and seriously punishing all kinds of market disorder and illegal behaviors. In June 2020, the Shenzhen Stock Exchange issued the standard for the implementation of disciplinary actions of listed companies (Trial Implementation) (hereinafter referred to as the "disciplinary standards"), which lists the specific violations in the practice of typical violations such as information disclosure and standardized operation, and clarifies the corresponding punishment standards. Meanwhile, it highlights the punishment standards for decision makers, decision makers, and operators of illegal behaviors Responsibility investigation of the main responsible person. We should distinguish between individual violations and unit violations, and increase the degree of punishment for "key minority" such as controlling shareholders and actual controllers who seriously infringe on the interests of listed companies by taking advantage of their dominant position.

According to statistics, from 2020 to the first half of 2021, the Shenzhen Stock Exchange punished 154 listed companies, involving 913 person times of "key minority" and other responsible personnel. The number and intensity of punishment were further improved, and the situation of strict supervision continued. Violations mainly focus on information disclosure violations, standard operation violations and securities trading violations, accounting for about 43%, 37% and 20% of the total.

Judging from the results of disciplinary actions, whether some listed companies hype hot concepts such as vaccines and masks through information disclosure announcements and easy investor interaction after the outbreak of Xinguan epidemic, or failed to fulfill performance commitments due to the "sequelae" of "three high" mergers and acquisitions, or capital occupation Major violations such as illegal guarantee seriously damage the legitimate rights and interests of listed companies and investors. As the "main brain" of specific decision-making and the "key minority" of executors are to blame. Even if there is no direct relationship with them, it is also a manifestation of non-standard corporate governance. The results of disciplinary actions reflect the regulatory concept of classified supervision and accurate investigation and punishment.

Strengthen deterrence and increase the frequency of top punishment

The reporter found that in the self-regulation measures of the exchange, for minor or serious violations, oral warning, supervision letter and circular criticism are generally given; for very serious or malignant violations, they will be publicly denounced or even "publicly identified" top disciplinary punishment.

According to the standard of punishment, for the directors and supervisors who have been punished for several mistakes, violated the regulations for many times, or have been punished by the CSRC and banned from the market and the circumstances are serious, it is stipulated that they are not suitable to hold the post of directors and supervisors of listed companies within 3, 5 or 10 years, and it is clear that if the violation seriously disturbs the market order or seriously damages the interests of investors, it shall be stipulated that the directors and supervisors of the board of directors and supervisors of listed companies are not suitable for the post within three, five or ten years, It is publicly recognized that he / she is not suitable for the post of director and supervisor of listed company in his / her lifetime. It can be said that "public identification" is the "big move" in the regulatory combination, which has a very strong regulatory deterrent.

For example, the Shenzhen Stock Exchange has used the "public identification" method for the "key minority" of Zhangzi Island who frequently perform the "magic" plot of scallop running.

In 2020, under the continuous investigation of the regulatory authorities, the farce of "where are the scallops" staged by the listed company Zhangzidao finally ushered in the final season. A series of "big lies" were uncovered. The financial and accounting reports of Zhangzidao were found to have major accounting errors. The relevant responsible personnel were also banned from the market by the CSRC and the Shenzhen Stock Exchange Public recognition and other administrative penalties and disciplinary measures. Among them, Wu Hou, the then chairman and President of Zhangzidao, was responsible for the correction of major accounting errors and misrepresentation of the company, and was finally publicly recognized as unfit to serve as the director, supervisor and senior manager of listed companies for life.

According to the reporter's statistics, since 2001, there have been 690 punishment records in the integrity archives of listed companies on the official website of Shenzhen Stock Exchange, including 487 records of notification and criticism, 184 records of public condemnation and 19 records of public recognition. From the perspective of time distribution, from 2019, the frequency of top punishment has increased significantly, with 81% of public censure and 78% of "public identification" respectively.

Establish a good ecology of respecting investors

With the rapid development of the capital market, the implementation of the new securities law, the criminal law amendment (11) and other legislative and judicial protection mechanisms, focusing on the "key minority" groups, will be more and more perfect.

The new securities law increases the code of conduct and accountability of "key minority" from the civil liability side and the administrative penalty side. For example, if we change the compensation liability of "key minority" for illegal information disclosure from "general fault liability principle" to "fault presumption responsibility principle", and expand the prohibition of securities market from "identity prohibition" to "transaction prohibition", the fixed penalty will be increased from the original maximum of 600000 to 20 million, and the fine range of illegal income will be increased from 1 to 5 times to 1 to 10 times.

From the aspect of criminal responsibility, the criminal law amendment (11) greatly increases the penalty intensity of fraudulent issuance and information disclosure fraud, and strengthens the criminal accountability of "key minority" such as controlling shareholders and actual controllers, including increasing the upper limit of the term of imprisonment of those responsible for fraudulent issuance and information disclosure fraud, increasing the scale of fines, and expanding the scope of criminal responsibility, We have strengthened the linkage with the new securities law, built up a three-dimensional system of accountability for violations of securities and futures, and significantly improved the deterrent effect of securities crimes.

On July 15, the China Securities Regulatory Commission (CSRC) issued the measures for punishing illegal securities and futures acts. Among them, in order to implement the "zero tolerance" opinion, and in combination with the provisions of the new securities law, further clarify and refine the law enforcement powers and measures such as freezing, sealing up, detaining, sealing up, restricting exit from the country and trading restrictions, as well as the situations and consequences of not cooperating with the investigation. At the same time, it is necessary to strengthen the organic connection with criminal justice. In the process of administrative punishment, if an illegal act is suspected of committing a crime, the case should be transferred to the judicial organ according to law and in a timely manner, so as to provide a strong institutional support for Comprehensively Strengthening the three-dimensional accountability, purifying the market ecology, and improving the level of supervision and law enforcement standardization.

"Strict punishment is the most important thing to do," but "the law is not enough for us.". The capital market is an ecosystem with complex mechanism, and the interests of all parties are intertwined. Cracking down on securities illegal activities is the internal requirement of maintaining the order of "three public" and creating a good market ecology. However, laws and regulations are the final bottom line. Severe punishment of those who violate laws and regulations is not only a means to prevent "key minority" from touching the bottom line, but also the ultimate goal is to establish a good ecological environment in which the market, the rule of law, the profession and investors are respected, so as to promote the long-term, healthy and stable development of the market.

His body is upright, and he will act without command“ "Zero tolerance" put forward the goal of 2022, including "the preliminary establishment of a law enforcement judicial system and coordination mechanism for cracking down on securities illegal activities in accordance with the law", "effectively curbing the frequent occurrence of major illegal and criminal cases" and "significantly improving the order of the capital market". The realization of this goal and the vigorous development of the capital market can not be separated from the high-quality listed company group. As the helmsman of the listed company, the "key minority" as the helmsman of the listed company, can only truly internalize the rule consciousness in the heart and externalize in the line, so as to achieve the effect of "loose and vigorous, not help and direct", and lead the listed companies to break the waves safely.

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