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Regulatory enforcement the cornerstone of healthy development of the capital market

source:Original    time:2016-09-13     Pageviews:643

(Xiao Gang, Chairman of China Securities Regulatory Commission)
In recent years, the Commission annually about 110 to initiate an investigation, it is possible to make a smooth average administrative penalty of not more than 60. The average annual transfer of criminal cases involving more than 30 pieces, eventually dropped more than half.
Establish and improve the "proactive" legislative protection mechanism to increase the intensity of the supply system. Can be considered "an assessment year, two years, a small change, a big change for five years," timely regulatory enforcement experience and trends are reflected in the legislation. After 20 years of development, China's capital market has become the world's largest emerging market, in economic and financial system is becoming increasingly important impact on the global financial markets is also growing. Currently, the CPC Central Committee and State Council to accurately grasp the new eighteen big since the reform and development of capital market positioning, new planning and courage to tackle tough, to accelerate the transformation of regulatory functions, strengthen the supervision of law enforcement, and earnestly safeguard the market open, fair, just and legitimate investors rights and interests, and promote the healthy development of capital markets.
First, strengthen the supervision of law enforcement is an important prerequisite for the healthy operation of capital markets
Capital markets have legal dependence, the need to promote the rule of law, strengthen the supervision of law enforcement to protect the operation of the market is not "derailed." And other elements of the different markets, highlighting the dual nature of the capital market, not only efficient, but also fragile. Without effective rules, or rules are not respected, profit-driven capital would break the integrity of the bottom line. Ranging from lead to shrinking market and stagnation, while in the breeding and transmission risk, threatening the economy and social stability. This determines the need to develop the capital market, it is inseparable from the rule of law, regulation and law enforcement can not be separated, the capital market must move towards the rule of law market. Early 18th-century England and France has occurred the stock market "bubble crisis" triggered the country into a political turmoil, the main reason is to rely on self-discipline early market regulator, manipulation, fraud is easy to spread, out of control. US stock market crash of 1929 broke out, the root cause is in the previous 100 years of history, neither uniform statute, did not come forward to maintain the market order public institutions. Roosevelt crisis prompted the government work hard to develop a series of securities laws, the SEC established.
Speculative capital market violations have associated properties, the development of a mature market, is a process of increasing law enforcement efforts. Determine the nature of fame and fortune capital, information fraud, insider trading, market manipulation and other illegal speculative market is concomitant with the long-term inherent nature, not because the market is mature, and strengthen the management will be able to completely disappear. Government's role is to the responsibility of law enforcement to curb the spread offense, the normal functioning of the market. For nearly a century, the United States Congress to exercise powers granted to the Commission from the general administrative law enforcement, to quasi-legislative and quasi-judicial powers, and gradually expand. The past 20 years, the US Congress gives the Commission the task of law enforcement is still overweight, which has functions beyond any administrative department, even on Wall Street that the US Commission for the separation of powers "the fourth sector." Even so, the SEC also often need to request the Federal Ministry of Justice, District Attorney joint action to provide support for investigators, American society is still often criticized the Commission inadequate enforcement. Hong Kong SAR has experienced in 1998 after the Asian financial crisis, to enhance law enforcement capabilities, drawing on the Anglo-American countries have increased the number of Commission authority, including subpoena power in the past only the judiciary can only be exercised, the right to search, detain rights. It caused most concern is the SFC obtain 3 years of criminal cases direct "filing" powers of the court in 2004. After China has the advantage, we need to draw on the experience and lessons learned abroad, and establish continuing to strengthen the supervision of law enforcement governance City concept. "Broad strict control" to strengthen the regulation and law enforcement is currently China's capital market regulation transformation "focus." The party's 18 since the CPC Central Committee and State Council made clear that an urgent need for transformation of government functions to create a favorable environment for development, to provide quality public services, safeguard social fairness and justice up. Capital market regulation needs to take this opportunity, greater respect for the objective laws of the market, reversing the "re-approval, light regulation" tendency. The "core business" of law enforcement to the regulatory approval of the transition from the audit, the "operations center" to check in before during, after the transfer of supervision. To not bother about, to firmly put on the need to manage a good thing, resolutely manage and manage well. Of illegal behavior, we do not hesitate to be investigated in the end, the punishment in place.
Second, China's capital market situation and challenges faced by regulation and law enforcement
China's capital market is "emerging and transitional" market, the rapid development of 20 years, the attention accordance with the "Regulations first" idea of the construction market, pay attention to constantly strengthen the supervision of law enforcement. However, we should clearly see that in the critical period of economic and social transformation, regulation and law enforcement areas faced with the grim situation and challenges.
More and more cases of illegal law enforcement resources are relatively tight. In recent years, illegal cases showed multiple high momentum. 2009-2012, the average annual increase of 14 per cent of cases in 2012, an increase of 21% in the first half-year 2013 has increased by 40%. Currently, more than half the number of cases of insider trading, fraud issue, disclosure of false information cases is increasing rapidly. At the same time you want to see, on the one hand, there are a large number of violations have not been investigated; on the other hand, with the multi-level capital market development, the market will continue to expand the scale of illegal cases will increase.
Faced with this situation, although in recent years continue to strengthen law enforcement team, but in a supervisory role yet in place the conditions change, lack of staff, lack of investment, lack of incentive problems still persist. Personnel are subject to various limitations preparation and funds, China Securities Regulatory Commission currently solely on law enforcement less than 600 people, less than 20% of the total number of employees. The SEC in 2011 after reorganization of departments, law enforcement personnel to reach 1236 people, accounting for 32% of the total. In addition, the mature markets in the use of advanced technology and equipment search Investigate violations, save a lot of manpower. Our lack of investment in this regard, but also keep up with scientific and technological development of the situation of law enforcement. Illegal covert means more complex, the relative lack of enforcement tools. With the accelerating pace of innovation of financial products, hybrid, crossover products more and more. With the Internet, the offender can be easily cross-market and cross-border crime. Anti-party investigation awareness is growing, began to anonymous insider trading, clustering, cross-border-oriented, multi-pass evolution, market manipulation appear short, multi attunement, conspiracy and cross-market trend. Part of the case of complex social relations, not only listed companies, agency executives, but also to financial institutions, party and government cadres. These are all regulators challenges.
At the same time, law enforcement found widespread cases difficult, hard evidence, penalties difficult to perform difficult problem. Verified cases of capital market rate of only 60% -70%, mainly because of lack of enforcement tools to investigate problems. Parties often do not cooperate with the investigation, it has occurred incidents and.
Maintain the market "Three," the task is arduous, urgent need to improve the law enforcement environment. In the capital market, false statements, market manipulation, insider trading and other acts of serious price distortions, so that the financial resources mismatch occurs, and this is the market, "Three" is not high performance. At the same time, social awareness of the rule of law is weak, regulation and law enforcement interference, illegal low cost, accountability is not timely. According to statistics, the rules and regulations of the capital market over 1200, to reach more than 200 terms of accountability, but whether it be criminal or administrative, economic responsibility, had not enabled the terms of more than two-thirds. Needless to say, both Li Fa Xiufa not timely, specific problems, but also law enforcement system suited to local protectionism remains a problem; the cause of both ways of the world, but also dare to tackle tough problems, not principled reasons. These factors persist, resulting in a considerable part of the responsibility can not be held accountable. In recent years, the Commission annually about 110 to initiate an investigation, it is possible to make a smooth average administrative penalty of not more than 60. The average annual transfer of criminal cases involving more than 30 pieces, eventually dropped more than half.
Protecting Investors increasingly heavy task, safeguard the interests of investors institutional arrangements incompatible. Protecting investors, it is to protect the market. China has the world's largest and most active groups of individual investors, retail investors accounted for, the lack of financial ability to identify risk, vulnerable to all kinds of fraud. In recent years, a number of major cases, especially in the main listing fraud cases involving numerous class, as many as hundreds of thousands of victims of investors, there is also a few thousand people. With the continuous improvement of public rights expectations, aspects of regulatory requirements as more calls are increasing, the task of protecting investors increased.
Existing enforcement mode program longer, less efficient, does not meet the needs of deterrence violations, we can not respond to the concerns of the market and society as soon as possible. On the one hand, China has not yet formed a new model of modern capital market administrative law enforcement and adapt to the rhythm; on the other hand, the rights of investors channel is not smooth, difficult for investors to obtain financial compensation. Existing laws and regulations are not adapted to the securities litigation practice group, activist investor support public institutions to be perfect.
Third, efforts to build a line with the national law enforcement system of capital market mechanism
To promote the healthy development of capital markets, we need to improve the use of the rule of law thinking deepening reform, promoting development, resolve conflicts and maintain stability of the ability to explore new ways to strengthen the supervision of law enforcement.
Establish and improve the "proactive" legislative protection mechanism to increase the intensity of the supply system. Li Fa Xiufa capital markets, need to reflect the Commercial Rules innovation more rapid change in the specific rules, enhanced initiative, flexibility. It could be considered "a year of assessment, a small change for two years, five years, a big change" approach, timely enforcement of regulatory experience and trends are reflected in the legislation. The current focus is to seize the "Securities Act", and "Futures Ordinance" as the basis, accelerate the formulation of the Basic Law, China's futures market. To further refine the offense that standard, improve the standard penalty, rich enforcement measures and means to enhance the operability and matching, establishing administrative reconciliation system law enforcement, research investor compensation system. Introducing more regulation and law enforcement forces to participate in criminal justice, strengthen the "row", "punishment" convergence.
Establish and improve the "efficiency type" administrative enforcement mechanism, enhance the ability to act as regulatory. Boldly explore financial regulators as a specific institution, from the reform of the existing civil service management, the implementation of flexible mechanisms in the institutional setup, staffing and remuneration system, and to attract and retain talented professionals. To further increase the inspection of law enforcement, strict and fair law enforcement, and civilized law enforcement, a substantial increase in the cost of illegal dishonesty, and resolutely investigate and deal with major cases. Further enrich the law enforcement forces to protect the safety of law enforcement personnel. To optimize the process to be efficient, to solve daily supervision, self-regulation and inspection functions of border enforcement and issues of mutual cooperation, the establishment of a unified monitoring platform to monitor illegal clues, realize investigation, trial, transfer and other law enforcement process standardization. Establishing Capital Market Report illegal incentives to improve the ability to detect cases.
Establish and improve the "restricting type" search in the separation mechanism, improve the administrative level of law enforcement. Internal control mechanism to implement separate investigation and trial, exploration and innovation of the field of administrative law enforcement. Objective "Charlie trial separation" from a different point of view on illegal factual findings and legal certainty applications, compensate for deficiencies and law enforcement aspects of vulnerability, both to maximize the scientific and fairness of law enforcement, and the formation of internal control checks and balances. After the light of the implementation of "Charlie trial separation" to increase the law enforcement aspect of the program and controversy, to avoid affecting the efficiency of law enforcement, to play the role of a good system, we must first ensure that the investigation and trial aspects of independence, the higher the right to monitor, but does not interfere with the investigation department punishment opinion filing of comments and trial departments. Secondly, we must have two links to check the trial division of labor, but also a collaboration, to speed up the unified standards for investigations and trial standards, establish a time limit handling system for major cases and timely two-way early intervention. In addition, for important cases or cases as soon as possible to respond to social needs, to establish a coordination mechanism for handling search in the timely solutions investigation, trial and the problem of convergence and divergence among other aspects of law enforcement, and improve law enforcement response capability.
Establish and improve the "compact" government cooperative mechanism to improve risk prevention and response capabilities. To hold systematic, regional financial risk the bottom line does not occur, the whole society to work together to build "big regulation, big enforcement" pattern. Government departments should strengthen information sharing, foster collaboration departments to strengthen supervision of financial mechanisms for coordination, avoid regulatory overlap and regulatory blind spots. Year 2012, the authorities provided to the Commission's involved personally identifiable information to reach more than 2,100 people, it has played an important role. The Commission should continue to strengthen cooperation with relevant departments to establish an efficient information network query channel. To the capital market for the major regulatory issues, the establishment of national authorities, local governments participate in the "joint action" mechanism, so that the risk of violations and promptly found and to stop, timely filing, timely investigation and timely punishment, timely disclosure and efficient disposal risks. To expand cooperation with overseas regulators. Self-regulatory organizations and other social forces to encourage broad participation in various ways, and jointly safeguard the market order. Improve the transparency of law enforcement, the initiative to accept the supervision of society and public opinion. (As contained in Section 15 in 2013, "Seeking Truth" magazine)
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