Over the past weekend, criminal law has been changed in China for crimes related to securities and financial derivatives transactions. This includes fraudulent securities issues or fraud related to mandatory disclosure.
According to an online statement from the Chinese Securities Commission, published on Saturday, December 26, there will be a threat of tougher penalties for crimes related to trading on financial markets. A maximum penalty of 15 years can be imposed for fraudulent issues of securities, while so far the ceiling has been set at five years. Fraudulent disclosure of mandatory information can be punishable by up to ten years, while now it has been a maximum of three years.
The tightening of punishments was given the green light by the All-China Assembly of People’s Deputies, the Chinese unicameral parliament. The amendment to the Criminal Code will enter into force on March 1 next year. The amendment also tightens sanctions against majority shareholders or financial intermediaries. The criminal area will also include, for example, incitement to fraud or concealment of important information.