China has amended a criminal law to increase imprisonment terms for securities and futures market crimes, including fraudulent securities issuances and information disclosure fraud.
The amendment of the law was passed on Saturday by the National People’s Congress Standing Committee and disclosed by the China Securities Regulatory Commission (CSRC) in an online posting
According to the amendment, imprisonment for fraudulent securities issuances which was previously 5 years will now be 15 years, while the maximum sentencing for fraudulent disclosures which was previously 3 years, was raised to 10 years.
The new law is expected to take effect from March 1.
The amendments also strengthen punishment against controlling shareholders and intermediaries such as sponsors who act as “gatekeeers” in securities issuances.
Instigating fraudulent issuances and concealment of relevant matters will be within the scope of criminal activity, according to the CSRC statement.
The China Securities Regulatory Commission is the main regulator of the securities industry in China.
China’s first Securities Law was passed December 1998, and became effective July 1, 1999. It is the country’s first comprehensive securities legislation, and grants CSRC “authority to implement a centralized and unified regulation of the nationwide securities market in order to ensure their lawful operation”.