The Seventh Publicity Series of the New Securities Law: Reward Reporting System in the Capital Market

Article 176 of the revised Securities Law of People's Republic of China (PRC) (hereinafter referred to as the new securities law) stipulates the relevant contents of the reward reporting system, which is the first time that the reward reporting system has risen to the level of the securities law, providing a substantive legal basis for any unit or individual to report suspected securities violations, which is of considerable progressive significance. Combined with the provisions of the new Securities Law, let's understand the main contents of the reward reporting system.

What is a reward for reporting?

Reward reporting exists in China's labor law, product quality, food and drug, safety production, environmental protection, securities and futures and other fields, and is a common behavior in the field of law enforcement. In fact, the reward reporting system is also called "whistleblower" system by some scholars. Whistler, known as an informer in English, originated from the action of whistling by British police to attract the attention of colleagues or the public when they found a crime. Later, by extension, it generally refers to a person who takes corrective actions to draw the public's attention to some social malpractice. Specific to the field of capital market, reward reporting generally means that the whistleblower has the right to report suspected securities violations. If verified, the relevant agencies will reward the whistleblower.

Article 176 of the new Securities Law stipulates the reward reporting system from three aspects. First, any unit or individual has the right to report suspected securities violations to the the State Council securities regulatory agency, namely the CSRC; Second, "the real-name reporting clues suspected of major violations of laws and regulations have been verified", and the CSRC will reward informants in accordance with regulations; Third, the CSRC "should keep confidential the identity information of informants."

Why does the capital market need a reward reporting system?

First of all, the professionalism and complexity of the capital market require a reward and reporting system. Nowadays, the financial products in the capital market are becoming more and more complex and the degree of specialization is getting higher and higher. It is difficult to solve the problem comprehensively only by relying on top-down administrative law enforcement. It is of great significance for maintaining the order of the capital market and better protecting the legitimate rights and interests of investors to skillfully rely on private forces to attract units and individuals to report suspected securities violations through appropriate material rewards. Informants are often insiders and generally know the actual situation better. For example, the 20 18 Changchun Changsheng vaccine fraud incident was exposed because of clues reported by employees in the internal production workshop.

Secondly, to strengthen the post-event supervision of the capital market, it is necessary for the reward reporting system to play a social supervision role. There are frequent cases of violating laws and regulations in the capital market, but the administrative law enforcement resources are limited. For the sustainable development of the capital market and the minimum cost to resolve this contradiction, it is necessary to use the reward reporting system to play the role of social supervision and build a collaborative supervision pattern. For example, Article 16 of "Guiding Opinions of the State Council on Strengthening and Standardizing Post-event Supervision" issued by the State Council on September 6, 2009 clearly stipulates: "Establish a system of' whistleblowers' and internal whistleblowers to reward and strictly protect meritorious personnel who report serious violations of laws and regulations and major risks."

Practice and prospect of China's capital market return report

2065438+On June 27th, 2004, the CSRC issued the Interim Provisions on Reporting Securities and Futures Violations, with 25 articles in total, which made detailed provisions on reporting securities and futures violations, including the provisions on reward amount, and made it clear that the maximum reward amount should not exceed 300,000 yuan. In addition, from 2065438 to August 2009, the CSRC plans to reward informants who provided clues about three cases, including Liao Yingqiang's market manipulation case, Jiangsu Yabaite Technology Co., Ltd.' s illegal information disclosure case and Ren Zixing's illegal information disclosure case, and entrust China Securities Investor Protection Fund Co., Ltd. to handle the specific matters such as the registration of informants for this award. This is the first "reward report" in China's capital market since the implementation of the Interim Provisions on Reporting Illegal Acts of Securities and Futures for more than five years.

As the saying goes, "the sword is sharpened and the plum blossom is bitter and cold", and any good system takes a long time to take root, blossom and bear fruit. The reward and reporting system should not only give appropriate incentives to informants, but also strengthen the all-round protection of informants to avoid their worries. It is believed that after the new Securities Law stipulates the reward reporting system, the reward reporting system in China's capital market will be more perfect, its role in the capital market will be more important, and there will be more and more cases of reward reporting.