The China Securities Regulatory Commission applies the system of commitments by administrative law enforcement parties. Investors in the Amethyst Storage case received timely and efficient compensation for their losses.

On December 29, 2023, the China Securities Regulatory Commission (CSRC) signed a commitment agreement with four intermediary agencies, including China Securities Co., Ltd., implicated in fraudulent issuance and illegal disclosure practices by Guangdong Purple Crystal Information Storage Technology Co., Ltd., indicating lack of diligence. The other intermediary agencies involved are Zhongtong Accounting Firm (Special General Partnership), Rongcheng Accounting Firm (Special General Partnership), and Guangdong Hengyi Law Firm. According to the agreement, the four intermediary agencies collectively paid approximately 1.275 billion yuan as commitment funds. In addition to the approximately 1.086 billion yuan already compensated to investors for losses incurred earlier, they also need to pay approximately 189 million yuan to the fund management agency, China Securities Investor Protection Fund Limited (referred to as the Investment Protection Fund Company), including about 11.79 million yuan in unpaid investor losses, and are required to conduct self-inspection and rectification, sternly hold responsible individuals accountable, and submit a written rectification report. As of now, the four intermediary agencies have paid the commitment funds to the Investment Protection Fund Company and have completed self-inspection and rectification, which has been verified by the CSRC. Given that the four intermediary agencies have fulfilled the commitment agreement, in accordance with Article 171 of the Securities Law and Article 15 of the Measures for the Implementation of the Administrative Enforcement Commitment System for Securities and Futures (Order No. 749 of the State Council), the CSRC terminated the investigation into the aforementioned matters concerning the four intermediary agencies on August 30, 2024. This case, as the first case to apply the administrative enforcement commitment system since the revision of the Securities Law in 2019, adheres to the principle of people-centeredness and efficiently protects the legitimate rights and interests of investors, demonstrating the comprehensive role of the administrative enforcement commitment system in relief, punishment, education, and resolution of market conflicts. Through the enforcement of the administrative enforcement commitment system, the intermediaries actively paid for investor losses, compensating approximately 10.86 billion yuan to 16,986 investors within two months (representing 97.22% of total affected parties and 98.93% of total losses). Going forward, the Investment Protection Fund Company will issue relevant announcements, allowing eligible investors who have not received compensation in the previous expedited payment process to claim the corresponding commitment funds. While safeguarding investors' legitimate rights and interests through the administrative enforcement commitment system, the four intermediary agencies have faced an economic cost of approximately 1.275 billion yuan (over 10 times their revenue) and have carried out the necessary rectifications as required. Moving forward, the CSRC will resolutely implement the spirit of the Central Financial Work Conference and the new requirements of the "Nine Articles for the Nation," ensuring a regulatory framework that is strict and robust. It will continue to intensify efforts to combat illegal activities in the capital market, strengthen the oversight responsibilities of intermediary agencies, uphold the principle of serving the people through finance, carry out the administrative enforcement commitment work in a steady and prudent manner according to the law, and more effectively protect the legitimate rights and interests of investors, especially small and medium-sized investors, to promote high-quality development of the capital market. This article is adapted from the CSRC. GMTEight editor: Huang Xiaodong.