CSRC significantly increases the rewards for "whistleblowers" of securities and futures illegal activities, with the highest reward reaching 1 million yuan.

On January 9th, the China Securities Regulatory Commission issued the "Regulations on Rewards for Whistleblowers of Securities and Futures Illegal Activities," which will come into effect from the date of announcement. The regulations significantly increase the reward standards, raise the bonus ratio, and increase the reward amount from 1% of the amount of the confiscated penalty in the case to 3%. For providing significant illegal activity clues, the upper limit of the bonus has been increased from 100,000 RMB to 500,000 RMB. If the provided case clues have a significant impact nationwide, involve a particularly large amount, or the whistleblower is an internal informant, the upper limit of the bonus for each case has been increased from 300,000 RMB or 600,000 RMB to 1 million RMB. The regulations specify that serious cases that seriously disrupt the order of the securities and futures markets, seriously endanger financial security, and seriously infringe on investors' legal rights and interests will be included in the rewarded cases. The conditions for rewardable cases have been increased from a penalty amount of 100,000 RMB to 1 million RMB. The full text is as follows: Regulations on Rewards for Whistleblowers of Securities and Futures Illegal Activities Article 1: In order to standardize the reporting of securities and futures illegal activities, encourage whistleblowers to provide significant illegal activity clues, increase the crackdown on securities and futures illegal activities, and based on laws and regulations such as the Securities Law of the People's Republic of China, the Securities Investment Fund Law of the People's Republic of China, the Futures and Derivatives Law of the People's Republic of China, and the Regulations on the Supervision and Management of Private Investment Funds, these regulations are formulated. Article 2: The term "whistleblower" refers to a unit or individual who is familiar with securities and futures illegal activities, has clues and evidence, is willing to take responsibility for protecting the legitimate rights and interests of investors, and actively provides securities and futures illegal activity clues to the China Securities Regulatory Commission (referred to hereinafter as the CSRC). Any unit or individual has the right to provide clues related to suspected securities and futures illegal activities to the CSRC and is encouraged to provide significant illegal activity clues in their real name. Article 3: The CSRC follows the principles of handling clues provided by whistleblowers in accordance with the law, responsibility allocation, strict confidentiality of information, and fully protecting the legitimate rights and interests of whistleblowers. Article 4: Whistleblowers can provide clues about individuals or units suspected of securities and futures illegal activities through the CSRC's published network platforms, mailing addresses, and other channels. Article 5: When providing clues through network platforms, whistleblowers should accurately provide their name, valid identification document, contact information, and address. If the whistleblower is a unit, they should accurately provide the unit's name, unified social credit code, mailing address, authorization letter, the valid identification document of the representative, contact information, and other information. The facts stated by the whistleblower and the materials provided should be objective and true. It is not allowed to falsely accuse, extort, or distort facts. Article 6: The CSRC and its dispatched agencies, direct agencies, exchanges, industry associations, and other units handle clues provided by whistleblowers according to their respective responsibilities. Article 7: The clues provided by whistleblowers should meet the following conditions: 1. They involve illegal activities that are expressly prohibited by securities and futures laws and regulations and result in administrative legal responsibilities; 2. They provide information about the suspected illegal entity's name (or name), identity, address, and other information; 3. They provide specific facts and objective evidence that can be verified. Article 8: Clues that fall under the following circumstances are not eligible for rewards: 1. Clues that do not meet the conditions specified in Article 7 of these regulations; 2. Illegal matters that have already been dealt with according to the law; 3. Whistleblowers who repeatedly provide clues about the same facts or reasons without new evidence or facts; 4. Other circumstances as stipulated by laws and regulations. Article 9: For whistleblowers providing clues who are internal informants, the clue processing unit may seek their assistance in verification after obtaining their consent. Internal informants referred to in the preceding paragraph are employees within the entity committing significant illegal activities or participants in significant illegal activities, excluding those who are legally obligated to report to regulatory authorities. Article 10: Whistleblowers can inquire about the processing procedure information of clues through the network platform. The clue processing unit does not need to provide additional responses or inform whistleblowers about the progress of the clue processing. Article 11: The CSRC may implement rewards for whistleblowers who provide effective clues and crucial evidence to assist in investigating significant securities and futures illegal activities. Article 12: Whistleblowers who provide significant illegal activity clues that seriously disrupt the order of securities and futures markets, seriously endanger financial security, seriously infringe on investors' legitimate rights and interests, and meet the conditions of factual clarity, valid evidence, and have been verified as true after the CSRC or its dispatched agencies have imposed administrative penalties or directly referred the case to the judicial authorities for securities and futures crimes leading to a guilty verdict with a fine of over 1 million RMB are eligible for rewards. Article 13: The following circumstances are not eligible for rewards: 1. Whistleblowers who impersonate others or fail to provide their real name information as required; 2. Clues related to illegal activities that have been discovered or are currently being investigated; 3. Clues related to illegal activities that have been reported or disclosed publicly in the news media or online; 4. Whistleblowers who are primarily responsible for the securities and futures illegal activities; 5. Clues provided by individuals who obtain information or take advantage of their work relationships as government personnel in the performance of their duties; 6. Whistleblowers who request to withdraw their clues or waive rewards; 7. Whistleblowers who obstruct or interfere with the investigation of illegal activities; 8. Other circumstances determined by the CSRC. The second and third items in the preceding paragraph do not include cases where whistleblowers provide new and definitive clues or evidence. The fourth item does not apply to cases where whistleblowers play a minor or auxiliary role in securities and futures illegal activities. Article 14: For rewarded cases, each case will be rewarded at a rate of 3% of the amount confiscated, with different caps on the rewards set based on the following situations: for providing significant illegal activity clues, the maximum reward amount for each case will not exceed 50,000 RMB; for clues that have a significant impact nationwide, involve a particularly large amount, or the whistleblower is an internal informant, the maximum reward amount for each case will not exceed 100,000 RMB. The reward amount for each case will not exceed the actual amount confiscated at the time of the reward. The confiscated amount refers to the total amount of illegal proceeds and fines confiscated from the entities involved in the illegal case. Article 15: If multiple individuals separately provide clues about the same illegal activity, the reward distribution to whistleblowers will be based on the significance, effectiveness, sufficiency, and timeliness of the clues, facts, and evidence provided by each whistleblower. In cases where multiple individuals jointly provide clues about the same illegal activity, the reward will be given to the first signatory, and the distribution of the reward will be negotiated by the co-signing whistleblowers. Article 16: Whistleblowers who voluntarily confess their participation in securities and futures illegal activities to the CSRC may be granted leniency, reduction, or no punishment in administrative penalties when the CSRC imposes administrative penalties according to the law. The CSRC may also recommend leniency or reduced punishment to relevant judicial authorities. Article 17: Whistleblowers who are rewarded in administrative penalty cases will be granted rewards after the expiration of the administrative penalty litigation period; for cases where the parties request administrative review or litigation, rewards will be granted after the relevant legal procedures are completed and the corresponding legal documents become effective. For whistleblowers who are rewarded in cases where the CSRC directly refers the case to judicial authorities without administrative penalties, rewards will be granted after the effective criminal judgment. Article 18: The CSRC will conduct whistleblower reward work based on the number of reward cases, calculation of reward amounts, and the department's annual budget situation. The CSRC will publish a list of cases to be rewarded, schedule of rewards, registration procedures, etc., and whistleblowers of cases to be rewarded should register and confirm within 3 months as required. Whistleblowers who fail to register and confirm as required will be deemed to have waived their rewards. Anonymous whistleblowers who supplement their real name information and whistleblower certification materials may receive rewards as if they were real name whistleblowers. Internal informants must provide corresponding identity verification materials; if they cannot provide identity verification as an internal informant, they will be rewarded like general whistleblowers. Article 19: The China Securities Investor Protection Fund Corporation will assist the CSRC in handling whistleblower reward-related work. Article 20: The reward funds will be included in the CSRC department budget and managed strictly and in accordance with regulations. Article 21: Information related to whistleblowers' names (or names), ID numbers, contact information, work units, home addresses, and other information that can identify the whistleblowers' identities will be strictly kept confidential except when used in accordance with the law. The clue processing unit shall manage whistleblowers' identity information anonymously. If contact with whistleblowers is necessary for verification and reward, whistleblowers must complete registration procedures. Relevant departments and units must maintain confidentiality throughout the process and protect whistleblowers' identity information. The CSRC will optimize and simplify the reward fund auditing and distribution process, collect internal informants' personal information only to the extent necessary for rewarding purposes, and handle internal informants' personal information in a way that minimally impacts their rights. Article 22: The staff responsible for handling clues and other relevant individuals must strictly adhere to the following requirements: 1. Strictly adhere to work procedures, appropriately handle related materials, and strictly forbid disclosing whistleblowers' identity information and related content; 2. No personal copying, replication, retention, or destruction of clue materials without permission; 3. Prohibit any behavior that may leak whistleblowers' identity information or clue content. Article 23: No unit or individual may use violence, coercion, defamation, disclosure of personal privacy, or other illegal means to retaliate against whistleblowers. They also cannot obstruct, limit, or interfere with internal informants from providing illegal clues by terminating or altering labor contracts or other methods. Article 24: Whistleblowers who violate the provisions of Article 5, Paragraph 2 of these regulations will bear legal responsibility in accordance with the law; those suspected of committing crimes will be transferred to judicial authorities for criminal liability. Article 25: Individuals responsible for causing information leakage and other consequences as a result of violating Article 21 of these regulations will be held accountable according to the seriousness of the situation, with administrative responsibility pursued in accordance with relevant regulations. Those suspected of committing crimes will be transferred to judicial authorities for criminal liability. Article 26: If the staff at the clue processing unit fails to perform their duties, neglects their responsibilities, acts corruptly, or otherwise affects the investigation, they may face disciplinary actions according to the severity of the situation. If suspected of committing a crime, they will be transferred to judicial authorities for legal action. Article 27: Units and individuals who violate Article 23 of these regulations will be handled according to relevant regulations. If issuers, listed companies, non-listed public companies, securities and futures trading institutions, and securities and futures service institutions engage in the behavior described in the preceding paragraph, they will be handled in accordance with corporate governance regulations, internal control deficiencies, and the law. Those who engage in retaliation against informants, or the involvement of compliance risk control, inspection, audit personnel in the suppression of illegal clues, will face more severe sanctions according to the law and regulations. If they are suspected of committing crimes, they will be transferred to judicial authorities for criminal liability. Article 28: Whistleblowers who collude with the offenders or withhold information about reasons for not being rewarded as outlined in Article 13 or deceive and the CSRC into rewarding them may have their reward decisions revoked, and any rewarded funds will be reclaimed. If they violate relevant laws and regulations, they will face administrative legal responsibility. Those who are suspected of committing crimes will be transferred to judicial authorities for legal action. Article 29: Whistleblowers who provide clues about illegal activities to the CSRC dispatched agencies or direct agencies will be handled according to these regulations. Those who meet the reward conditions will be rewarded according to these regulations. Article 30: The terms "above" and "not exceeding" in these regulations include the specified numbers. Article 31: These regulations are interpreted by the CSRC in conjunction with the Ministry of Finance. These regulations will come into effect upon announcement, and the "Interim Provisions on Reporting Illegal Practices in Securities and Futures Business" (CSRC Announcement [2020] No. 7) issued on January 14, 2020, will be abolished. This text was selected from the "CSRC official website"; edited by: Huang Xiaodong.