CSRC: Providing effective leads and key evidence to assist in the investigation of major violations of securities and futures laws will be rewarded.

On September 30th, the China Securities Regulatory Commission and the Ministry of Finance publicly sought opinions on the "Regulations on Rewards for Whistleblowers of Securities and Futures Violations (Draft for Solicitation of Opinions)." The China Securities Regulatory Commission rewards whistleblowers who provide effective clues and key evidence to assist in the investigation of major securities and futures violations. Whistleblowers who provide serious clues about major violations that seriously disrupt the order of the securities and futures market, seriously endanger financial security, and seriously infringe on the legitimate rights and interests of investors, which are clear, proven, and confirmed to be true after investigation by the China Securities Regulatory Commission or its agencies according to the law, and which have resulted in administrative penalties or direct referrals to judicial authorities for securities and futures crimes with fines exceeding 1 million yuan, will be rewarded. The draft mentions that for whistleblowers who meet the reward conditions, a reward of 3% of the amount of fines and confiscations will be given for each case, with limits on the maximum reward amount for different situations. For providing significant violation clues, the maximum reward amount for each case is not more than 500,000 yuan; for cases with significant influence nationwide, exceptionally large amounts involved, or whistleblowers who are internal informants, the maximum reward amount for each case is not more than 1 million yuan. The original text of the draft is as follows: Regulations on Rewards for Whistleblowers of Securities and Futures Violations (Draft for Solicitation of Opinions) Article 1: In order to regulate the reporting of securities and futures violations, encourage whistleblowers to provide significant violation clues, and increase the crackdown on securities and futures violations, these regulations are formulated in accordance with the Laws of the People's Republic of China on Securities, Securities Investment Funds, and Futures and Derivatives. Article 2: Whistleblowers, as mentioned in these regulations, refer to individuals or entities who are aware of securities and futures violations, have evidence, are willing to take responsibility for protecting the legitimate rights and interests of investors, and actively provide securities and futures violation clues to the China Securities Regulatory Commission (referred to as the China Securities Regulatory Commission). Any individual or entity has the right to provide clues about alleged securities and futures violations to the China Securities Regulatory Commission and is encouraged to provide significant violation clues in their real names. The China Securities Regulatory Commission rewards whistleblowers who provide effective clues and key evidence to assist in the investigation of major securities and futures violations. Article 3: The China Securities Regulatory Commission treats whistleblowers' provided clues following the principles of lawfulness, fairness, and gradation of responsibility, strictly maintains confidentiality, and fully protects the legitimate rights and interests of whistleblowers. Article 4: Whistleblowers can provide clues about individuals or entities suspected of securities and futures violations through the China Securities Regulatory Commission's website, mailing address, and other channels. Article 5: When providing clues through the website, whistleblowers should accurately provide their name, valid identification, contact information, and address. For whistleblowers who are entities, they should accurately provide the entity's name, uniform social credit code, mailing address, authorization letter, and the representative's valid identification, contact information, and other details. The facts and evidence provided by whistleblowers should be objective and truthful. Fabricating facts, making false accusations, extortion, or defamation are not allowed. Article 6: The China Securities Regulatory Commission and its agencies, divisions, exchanges, industry associations, and other clue-processing units will handle clues provided by whistleblowers according to their respective responsibilities. Article 7: Clue-processing units register clues that meet the following conditions: (1) The violation is clearly prohibited by securities and futures laws and regulations and specifies administrative legal responsibilities. (2) Provides the name (entity name), identity, and address information of the suspect. (3) Provides specific facts and objective evidence that can be verified. Article 8: Clue-processing units will not register clues that do not meet the conditions mentioned in Article 7 of these regulations, or in the following circumstances: (1) Allegations have been handled according to the law; (2) The whistleblower repeatedly provides the same clue without new facts or evidence; (3) The violation has exceeded the statute of limitations for administrative penalties; (4) Other circumstances as specified by laws and regulations. Clues that are not registered will be archived by clue-processing units. Article 9: The clue-processing units will verify registered clues within their legal responsibilities and handle them according to relevant regulations on securities and futures supervision. For whistleblowers who provide illegal case clues, the unit should give priority to conducting verifications and handling.