China Securities Regulatory Commission issues the Measures for the Implementation of Supervision and Management of Securities and Futures Markets.

On December 31, the China Securities Regulatory Commission issued the "Measures for the Implementation of Supervision and Management Measures for the Securities and Futures Market", which mentioned that implementing institutions shall, in accordance with laws, administrative regulations, and the provisions of the China Securities Regulatory Commission, implement supervision and management measures on individuals with one of the following circumstances: (1) engaging in illegal activities related to securities funds, futures, and derivatives; (2) governance structure of securities funds, futures, and derivatives operating agencies, and private fund managers being unsound, internal controls being imperfect, and operational management being chaotic; (3) risk control of securities funds, futures, and derivatives operating agencies, and private fund managers not meeting the requirements; (4) other circumstances stipulated by laws, administrative regulations, and the rules of the China Securities Regulatory Commission. Supervision and management measures may be applied individually or combined. The full text is as follows: Measures for the Implementation of Supervision and Management Measures for the Securities and Futures Market (Passed at the 6th Executive Meeting of the China Securities Regulatory Commission on December 30, 2025) Article 1 In order to standardize the implementation of supervision and management measures in the securities and futures market, maintain order in the securities and futures market, prevent market risks, protect the legitimate rights and interests of citizens, legal persons, and other organizations, and in accordance with the "Securities Law of the People's Republic of China", the "Law on Securities Investment Funds of the People's Republic of China", the "Law on Futures and Derivatives of the People's Republic of China", the "Regulations on the Supervision and Management of Securities Companies", the "Regulations on the Administration of Futures Trading", the "Regulations on the Supervision and Administration of Private Investment Funds" and other laws, administrative regulations, these measures are formulated. Article 2 The supervision and management measures referred to in these measures are measures taken by the China Securities Regulatory Commission (hereinafter referred to as the CSRC) and its dispatched agencies (hereinafter collectively referred to as implementing institutions) in order to protect public interests, promptly correct illegal behavior, prevent market risks, and maintain market order, and they shall take the following measures against the parties according to law: (1) Order to correct; (2) Supervisory talks; (3) Issuance of warning letters; (4) Order to make public explanations; (5) Order to report regularly; (6) Order to increase the frequency of internal compliance inspections; (7) Order disciplinary action against relevant personnel; (8) Identified as unsuitable candidates; (9) Order replacement of directors, supervisors, senior management personnel, or responsible persons of relevant business departments or branches, or restrict their rights; (10) Restriction of business activities, order suspension of some or all business activities, and cease approval of new business; (11) Order shareholders responsible to transfer shares, responsible partners to transfer property shares, restrict rights of responsible shareholders or partners; (12) Restriction on distribution of dividends, restriction on payment of remuneration to directors, supervisors, senior management personnel, or provision of benefits; (13) Restriction on the allocation and use of company's own funds or risk reserve funds; (14) Restriction on the transfer of property and establishment of other rights on property; (15) Other supervision and management measures as stipulated by laws, administrative regulations, and the rules of the CSRC. Article 3 When implementing supervision and management measures, the principles of legality shall be followed, and the measures shall be implemented in accordance with the procedures prescribed by laws, administrative regulations, and the rules of the CSRC. Administrative normative documents shall not set supervision and management measures. When implementing supervision and management measures, the efficiency principle shall be followed, illegal behavior shall be promptly corrected, and the fusion of risk prevention and control with education shall be adhered to. When implementing supervision and management measures, the principle of fairness shall be followed, based on facts, and shall be proportionate to the nature, circumstances, severity, and size of the risk of the behavior. Article 4 In accordance with the laws, administrative regulations, and the regulations of the China Securities Regulatory Commission, the implementing institutions shall take supervisory and management measures against individuals who have one of the following circumstances: (1) Engaging in illegal activities related to securities funds, futures, and derivatives; (2) Governance structure of securities funds, futures, and derivatives operating agencies, and private fund managers being unsound, internal controls being imperfect, and operational management being chaotic; (3) Risk control of securities funds, futures, and derivatives operating agencies, and private fund managers not meeting the requirements; (4) Other circumstances stipulated by laws, administrative regulations, and the rules of the CSRC. Supervision and management measures may be applied individually or combined. Article 5 Implementing institutions shall, in accordance with the law, record the evidence, decisions, and service of supervision and management measures in written, audiovisual, and other forms, and archive and retain them. Article 6 If supervision and management measures require on-site law enforcement, they shall be implemented by enforcement personnel who have the qualifications for administrative enforcement. Enforcement personnel shall not be less than two people, except for provisions in laws and administrative regulations. Article 7 Implementing institutions shall make supervision and management decisions within six months from the date of initiating the implementation procedure of supervision and management measures. In case of special circumstances that require an extension, approval shall be obtained from the person in charge of the implementing institution, and the extension period shall not exceed six months each time. Article 8 If the illegal behavior is not discovered within two years, the implementing institutions shall no longer take supervision and management measures against such illegal behavior, except as otherwise provided in laws, administrative regulations, or regulations of the CSRC, or unless the effects of the illegal behavior have not been eliminated. The period stipulated in the preceding paragraph shall be calculated from the date of the occurrence of the illegal behavior. If the illegal behavior is continuous or ongoing, the period shall be calculated from the date of the end of the behavior. Article 9 If the personnel involved in the implementation of supervision and management measures by the implementing institutions have a direct interest in or other relationships that may affect impartial law enforcement with the parties, they shall actively apply to recuse themselves; the parties also have the right to apply for their recusal. The implementing institutions shall make a decision on whether to recuse based on the recusal application, and may make a recusal decision directly without applying. Article 10 The implementing institutions, when implementing supervision and management measures, shall clarify the facts and collect evidence comprehensively. Evidence materials obtained by the implementing institutions in accordance with the law for the performance of other statutory duties, materials transferred or announced by authorities with the right, and materials obtained through other channels in accordance with the law, shall be used when implementing supervision and management measures after meeting the authenticity, legality, and relevance requirements upon review. Article 11 If the implementing institutions implement the supervision and management measures specified in Articles 7 to 14 of these measures, they shall serve a prior notice to the parties, informing them of the content, facts, reasons, and basis of the proposed supervision and management measures, and informing the parties of their right to make statements, defenses, etc., in accordance with the law. If the parties request to make statements, defenses, they shall be made within five working days after the prior notice is served, and statement, defense opinions shall be made within ten working days after the prior notice is served. If the parties submit a written request to extend the statement or defense period, an extension may be granted after approval; failure to submit statements or defenses as required shall be deemed a waiver of the right to make statements or defenses. When the parties make statements and defenses as prescribed in the preceding paragraph, the implementing institutions shall fully listen to the opinions of the parties, verify the facts, reasons, and evidence presented by the parties; if the facts, reasons, or evidence provided by the parties are established, the implementing institutions shall adopt them. Article 12 If adjustments are made to the main facts, reasons, basis as determined in the served prior notification letter, or to the content of the proposed supervision and management measures, a new prior notice shall be served to the parties, except for changes that are favorable to the parties. Article 13 The implementation of supervision and management measures shall be subject to legal review, except as otherwise provided in laws, administrative regulations, and the rules of the CSRC. Article 14 When implementing supervision and management measures, the implementing institutions shall make a decision on the supervision and management measures. The decision on supervision and management measures shall specify the following: (1) The name or title of the parties involved; (2) The facts on which the supervision and management measures are based; (3) The types of supervision and management measures and their basis; (4) The implementation methods, duration, and whether rectification and acceptance are required for the supervision and management measures; (5) The way and timeframe for applying for administrative reconsideration or administrative litigation; (6) The name of the implementing institution and the date of implementation of the supervision and management measures; (7) Other matters that shall be specified by law. The decision on supervision and management measures shall be stamped with the seal of the implementing institution. Article 15 After making a decision on supervision and management measures, it may be made public, except where it involves state secrets, commercial secrets, personal privacy, or where it may endanger national security, public security, economic security, social stability, market stability, etc. Supervision and management measures that require public explanations shall be made public after the decision is made. Article 16 Within seven working days after the decision on supervision and management measures is made and related documents are completed, the implementing institutions shall, in principle, serve the parties in accordance with relevant provisions such as the "Civil Procedure Law of the People's Republic of China". If the parties agree, fax, email, or other methods may be used for service. Article 17 During the period when the parties are subject to the supervision and management measures specified in Articles 7 to 14 of these measures, if the parties meet the conditions for lifting the restrictions, the implementing institutions may lift the restrictions measures on their own or based on the application of the parties. If the restrictions are lifted in advance, or when the term of the restrictions expires, the parties shall rectify as required and submit a rectification report to the implementing institutions. The implementing institutions shall conduct timely acceptance in accordance with regulations, and if the acceptance meets the requirements, the implementing institutions shall lift the relevant restrictive measures against the parties within three working days from the completion of the acceptance. Article 18 After making a decision on supervision and management measures or lifting the restrictive measures, the implementing institutions may notify the parties' unit, competent authority, superior unit, relevant disciplinary and supervisory authority, relevant industry association, or their controlling shareholders, actual controllers, etc. Article 19 If the following circumstances arise that seriously harm financial order, affect the sound operation of financial institutions, damage public interests, or cause other serious harmful consequences and it is not practical to take the supervision and management measures specified in Articles 7 to 14 of this measure immediately, the implementing institutions may, on the spot or through electronic communication, listen to the opinions of the parties, not be subject to the restrictions on form and time limits set forth in Article 11 of this measure, and may not apply if it is indeed impossible to contact the parties due to special circumstances. The circumstances are as follows: (1) Deterioration of regulatory indicators of securities and futures operating institutions; (2) Deterioration of the management situation of securities and futures operating institutions; (3) Occurrence of major risk events; (4) Existence of other major risk hazards. Article 20 For other supervision and management measures specified in Article 15 of this measure that have a significant impact on the rights and obligations of the parties, the provisions of Article 11, Article 12, Article 17, and Article 19 of this measure shall apply. Article 21 If the parties disagree with the decision on supervision and management measures, they may apply for administrative reconsideration or directly file a lawsuit with the people's court in accordance with the law. During the proceedings of reconsideration and litigation, the execution of supervision and management measures shall not be suspended, except as otherwise provided by law. Article 22 If the illegal behavior is subject to administrative penalties, supervision and management measures shall no longer be taken, except as necessary to promptly prevent risks or protect the legitimate rights and interests of investors; if it involves suspicion of a crime, it shall be transferred to the judicial authorities for handling. Article 23 If the parties apply to apply the system of commitments of parties involved in administrative law enforcement and fully comply with the recognized agreement, the implementing institutions shall no longer impose supervision and management measures on the same conduct of the parties. Article 24 If the staff of the implementing institutions have acts of dereliction of duty in the implementation of supervision and management measures, causing significant losses, serious consequences, or negative impacts, they shall be investigated for accountability in accordance with regulations, discipline, and laws. Article 25 These measures shall come into force on June 30, 2026. The "Measures for the Implementation of Supervision and Management Measures for the Securities and Futures Market (Trial)" shall be repealed at the same time. This article is compiled from the official website of the China Securities Regulatory Commission, edited by GMTEight: Xu Wenqiang.