The Shanghai Stock Exchange released regulations on underwriting violations, improving the determination of violation penalties.

Shanghai Stock Exchange released and implemented the Guidelines for the Application of Securities Issuance and Underwriting Rules No. 2 - Regulation of Violations in Issuance and Underwriting from the date of release. This revision, while keeping the basic structure of the Regulation of Violations in Issuance and Underwriting unchanged, made targeted supplements and improvements to certain provisions. The main revisions are as follows: First, the improvement of regulatory principles and rectification requirements. In the general principles section, it is explicitly stated that the implementation of self-discipline management measures should adhere to the principles of "classification, precise supervision, and scientific accountability," ensuring that penalties are proportionate. Furthermore, the requirements for self-examination and rectification by regulated entities after measures are taken have been further clarified. Second, the enhancement of criteria for determining the severity of violations and penalties. Firstly, the criteria for determining the severity of violations have been refined, with a more detailed consideration of factors such as the negative public opinion caused by violations and harm to social public interests. Secondly, situations involving bribery in the capital market have been included in the criteria for severe penalties. Thirdly, situations where effective measures have been taken to mitigate adverse impacts and intermediary institutions have diligently fulfilled their related verification obligations have been included in the criteria for lenient treatment, reduction, or exemption from penalties. Third, the enhancement of specific violations in the issuance and underwriting process. Specific violations related to securities companies issuing research reports on the investment value of new stocks have been detailed, with clear post-monitoring standards for the realization of profit forecasts and medium- to long-term stock price performance in investment value research reports. The criteria for violations in fee charging by intermediary institutions have also been expanded to cover additional subjects.