CCTV News: On January 17, 2025, the China Securities Regulatory Commission issued the "Basic Rules for Administrative Penalty Discretion of China Securities Regulatory Commission" (hereinafter referred to as the "Discretion Rules"), which will come into effect on March 1, 2025.

Standardizing administrative discretion is a key link in promoting the construction of a law-based government. The principled provisions in laws, administrative regulations, and rules, or the scope of law enforcement authority and discretion that have certain flexibility are directly related to the unity of law enforcement standards and regulatory authority, and are of great significance to promoting fair law enforcement and stabilizing market expectations. In recent years, the Securities Law and the Futures and Derivatives Law have been revised and promulgated one after another, and the upper limit of fixed penalty and multiple penalty is raised. Under the new situation, how to make full use of the administrative penalty power granted by the law is an urgent issue. Therefore, it is necessary to formulate and issue special administrative penalty discretionary rules, clarify administrative penalty hierarchies, unify discretionary standards of each law enforcement agency, and provide institutional guarantees for fair development of administrative law enforcement work.

The China Securities Regulatory Commission solicited opinions from the public on the "Discrimination Rules" from June 7 to July 7, 2024, and listened to opinions from relevant parties through holding symposiums and soliciting opinions in writing. All sectors of society have generally supported the content of the "Discrimination Rules", and the opinions and suggestions put forward by the China Securities Regulatory Commission carefully studied them one by one, and all reasonable suggestions were absorbed and adopted.

The "Discrimination Rules" have a total of twenty-five articles, mainly including the following contents: First, clarify the discretion order and discretionary plot. Six discretionary levels are set, including "no punishment, exemption of punishment, reduction of punishment, lighter punishment, general punishment, and severe punishment", and the applicable circumstances of each discretionary level are stipulated. The second is to clarify the relevant punishment rules. For joint violations, a discretionary rule of "first overall determination and then distinguish punishment" is established. For the directly responsible persons in the unit, the size of responsibility and punishment will be comprehensively analyzed from the aspects of their role in the illegal act, their positions and performance of their duties, their degree of knowledge, and their actions taken after they are informed. Regarding multiple violations, the basic rules of "cumulative penalties for multiple independent violations" have been clarified. The third is to establish a system of approval or collective discussion by the main person in charge. If administrative penalties are imposed on complex circumstances or major violations, they shall be decided by collective discussion by the person in charge. If the application of the Discretion Rules may cause obvious improperness, obvious unfairness, or the objective situation changes and needs to be adjusted and applied, it shall be approved by the main person in charge of the China Securities Regulatory Commission or collectively discussed and decided. Fourth, implement "three-dimensional accountability" and "connection of execution". Connect administrative penalties for securities and futures violations with criminal liability, civil liability, administrative supervision measures, self-discipline management measures, etc. The handling methods for three types of "execution connection" situations are stipulated. Fifth, strengthen supervision and guidance of the China Securities Regulatory Commission. It is clarified that the CSRC supervises and guides the dispatched agencies to exercise their punishment powers, and achieves the unification of the application of punishment standards.

In the next step, the CSRC will strictly implement a series of decisions and arrangements of the CPC Central Committee and the State Council on administration according to law, further standardize and unify the discretionary standards of administrative penalty, ensure fairness and transparency in law enforcement, implement the provisions of the Securities Law, Administrative Penalty Law, and Discretionary Rules, and form a clear-minded, clear logic, scientific and complete, effective and effective administrative penalty discretionary system as soon as possible, further stabilize market expectations, maintain fairness and justice, and provide more solid legal guarantees for building a safe, standardized, transparent, open, dynamic and resilient capital market.