China: New Zero-Tolerance Crackdown on Securities Market Crimes and Irregularities
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Statutes relating to securities enforcement
The legal and regulatory system of China’s securities market is a system of laws and regulations consisting of applicable laws, administrative regulations, departmental rules, normative documents and industry self-regulatory rules, with the PRC Securities Law as the core. The primary purpose is regulating the operation of the securities market and protecting the legal rights and interests of investors.
The PRC Securities Law was enacted on 29 December 1998, and has been amended five times since. The latest amendment to the Law was promulgated on 28 December 2019.
The PRC Securities Law applies to the offering and trading of stocks, corporate bonds, depositary receipts and other securities recognised by the State Council within the territory of China; the listing and trading of government bonds and shares of securities investment funds; and any offering or trading of securities outside China that ‘disrupts the order’ of the domestic market of China and causes any damage to the legal rights and interests of domestic investors, among many other provisions.
At the criminal level, securities offences are regulated in Chapter III ‘Crime of Undermining the Order of the Socialist Market Economy’ of the PRC Criminal Law. In particular, in response to the revision of the PRC Securities Law in 2019, Amendment XI to the PRC Criminal Law was issued on 26 December 2022, which revised securities crimes, including fraudulent issuance of securities, manipulation of the securities market and illegal disclosure of information. This is to coordinate with the newly amended PRC Securities Law and develop a concerted effort to crack down on securities market crimes with ‘zero tolerance’.
The authorities responsible for investigating and enforcing the Securities Law
So far as administrative law enforcement is concerned, the China Securities Regulatory Commission (CSRC) and local securities regulatory bureaus are primarily responsible for investigating and enforcing securities laws; at the same time, stock exchanges, as self-regulatory organisations, are also able to require their members to self-regulate or to impose disciplinary actions against members, investors, financial service providers and practitioners who violate laws, regulations and self-regulatory rules.
The CSRC is located in Beijing and has 20 departments. Among others, the Enforcement Bureau is mainly responsible for formulating applicable regulations on securities and futures law enforcement, handling matters such as filing and dismissing cases and coordinating and directing the investigation of cases. The Administrative Sanctions Committee is mainly responsible for formulating rules for determining securities and futures law violations, examining cases referred by the Enforcement Bureau, presiding over hearings (in accordance with the legal procedures) and formulating opinions on administrative penalties. The Department of Legal Affairs is mainly responsible for formulating laws, regulations, rules and their implementation rules for the securities and futures market, as well as advising on and interpreting legal issues that arise in the course of supervision.
At the same time, the CSRC has set up 36 securities supervisory bureaus in provinces, autonomous regions, municipalities directly under the central government and cities specifically designated in the state plan, as the local agencies of the CSRC. Their main functions are to supervise and manage the securities- and futures-related activities of listed companies, securities and futures companies and institutions, securities and relevant service providers such as consulting firms, law firms, auditors and asset appraisal institutions, and investigate and penalise the violations in the securities and futures market.
Stock exchanges, as self-regulatory organisations, also play a key role in maintaining and safeguarding the order of China’s capital markets. According to the Measures for the Administration of Stock Exchanges, stock exchanges shall ‘formulate self-regulatory rules, specify the duties and powers of self-regulatory organizations, establish self-regulatory systems, and take self-regulatory measures or disciplinary actions against its members, investors and practitioners who violate laws, regulations and self-regulatory rules’. Stock exchanges in China include the Shanghai Stock Exchange, the Shenzhen Stock Exchange and the Beijing Stock Exchange.
In criminal proceedings, the public security organs, procuratorates and courts are respectively responsible for investigating, prosecuting and adjudicating securities crime cases. The public security organs are responsible for investigating securities crime cases. Securities crime cases are usually investigated by the economic investigation departments of the local public security organs, while major cases are usually investigated by the Securities Crime Investigation Bureau of the Ministry of Public Security (MPS).
The procuratorates play roles at different stages. During the investigation, the procuratorates decide whether to arrest the suspect. When that is completed, the procuratorates may decide whether to further examine the case and prosecute. In 2021, the Supreme People’s Procuratorate (SPP) established a procuratorate office at the CSRC, responsible for enhancing the coordination between criminal and administrative securities enforcement, guiding procuratorates across the country in handling securities crime cases and conducting research on securities crimes prevention and governance.
The courts are the judicial authorities responsible for deciding securities crime cases. The Intermediate People’s Court is the first instance court in securities crime cases.
In 2011, to further strengthen the connection between administrative law enforcement and criminal justice, the Supreme People’s Court (SPC), the SPP, the MPS and the CSRC jointly issued the Opinions on Handling Cases of Securities and Futures-Related Violations and Crimes, which provides guidelines on the sharing of evidence, the exchange of intelligence and information, and consultations between the regulators in the administrative and criminal regimes.
Most common violations in securities enforcement and the corresponding liabilities
Information disclosure violations, insider trading, market manipulation, violations by intermediaries who fail to exercise due diligence, illegal transfer of securities and short-term trading are the most common types of violations in securities law enforcement, and have always been the focus of China’s securities regulators.
Information disclosure violations
The PRC Securities Law provides that the information disclosed by persons with disclosure obligations shall be true, accurate and complete, and shall not contain any false or misleading statement or material omissions. Common violations include the following: failure to disclose in accordance with the rules, and disclosure of information containing false or misleading statements and material omissions. Information disclosure violations are the most common securities violations.
The PRC Securities Law stipulates that persons on the inside who have access to insider information in securities trading activities, or persons who have illegally obtained insider information, shall not buy or sell the company’s securities, divulge such information, or advise anyone else to buy or sell such securities before the public disclosure of such insider information. The most common violation is where the perpetrator illegally obtains insider information through liaison, communication, meeting or otherwise with the person who knows the insider information and uses it to trade the relevant securities.
The PRC Securities Law prohibits manipulation of the securities market to influence or attempt to influence the trading price or volume of securities by any person by any of the following means:
- acting alone or through a conspiracy, concentrating advantages in terms of funds, shareholdings or information to buy or sell securities jointly or continuously;
- colluding with another person to trade securities together at a time, price and in a manner agreed upon in advance;
- trading securities between accounts under the person’s actual control;
- placing and cancelling orders frequently or in large numbers, not for the true purpose of completing the transactions;
- inducing investors to trade securities by using false or uncertain material information;
- providing to the public any evaluation, forecast or investment advice on a security or the issuer, but trading the security in the opposite direction;
- manipulating the securities market through activities on any other relevant market; and
- otherwise manipulating the securities market.
Violations by intermediaries who fail to exercise due diligence
The PRC Securities Law requires accounting firms, law firms and securities service institutions engaged in securities investment consulting, asset appraisal, credit rating, financial advisory and information technology system services to act with due diligence, perform their duties and provide services for securities transactions and related activities according to the relevant business rules, and ensure that the documents they prepare and issue for the issuance, listing, trading and other securities business activities such as audit reports and other forensic reports, asset appraisal reports, financial advisory reports, credit rating reports or legal opinions are true, accurate and complete. The gatekeeper responsibilities of intermediaries are expected to be further strengthened as China begins to formally implement a comprehensive registration system.
Illegal transfer of securities
The PRC Securities Law stipulates that a shareholder holding 5 per cent or more of the shares, actual controller, director, supervisor or officer of a listed company, or any other shareholder holding any shares offered by the issuer before its initial public offering or shares offered by a listed company to certain offerees and who transfers the shares that they hold in the company shall not violate the provisions of laws, administrative regulations and the provisions issued by the securities regulatory authority of the State Council on the holding period, time of sale, number of shares sold, methods of sale and disclosure of information.
The PRC Securities Law stipulates that where a shareholder holding 5 per cent or more of the shares of a company, a director, a supervisor or an officer of a listed company or a company whose shares are traded on another national securities trading venue approved by the State Council sells shares of the company or other securities with the property of a stock within six months of its purchase or purchases of such shares or other securities, the profits therefrom shall belong to the company.
In the PRC Criminal Law, the types of criminal offences in the securities market are basically those prohibited by the PRC Securities Law. In other words, violations in the securities market will trigger criminal liability when reaching the seriousness prescribed by the criminal law. Sentences for securities crimes include imprisonment and fines.
Crime of illegal disclosure or non-disclosure of important information
Where an illegal disclosure or non-disclosure of important information occurs under ‘serious circumstances’, the person directly in charge and other liable persons shall be sentenced to imprisonment of not more than five years or be fined. Under extremely serious circumstances, imprisonment of over five years and a fine may be imposed.
Where any controlling shareholder or actual controller commits, organises or instigates a disclosure offence, they will be subject to the same penalties.
Crime of insider trading or leaking insider information and crime of trading with undisclosed information
Where insider trading or leaking of insider information occurs under serious circumstances, the offender shall be sentenced to imprisonment of not more than five years or a fine of one to five times the illegal income. Under extremely serious circumstances, imprisonment of five to 10 years and a fine of one to five times the illegal income may be imposed. In practice, the standard of ‘particularly serious circumstances’ is normally five times that of ‘serious circumstances’.
The crime of insider trading with undisclosed information is punishable in line with the crime of insider trading.
Crime of manipulating the securities market
Where manipulating the securities market occurs under serious circumstances, the offender shall be sentenced to imprisonment of not more than five years or be fined. Under extremely serious circumstances, imprisonment of five to 10 years and a fine may be imposed.
Crime of providing false supporting documents
Where providing false supporting documents occurs under serious circumstances, the intermediary shall be sentenced to imprisonment of not more than five years and fined. Under extremely serious circumstances, imprisonment of five to 10 years and a fine may be imposed. However, the Law does not yet specify the criteria for ‘extremely serious circumstances’.
For acts of providing supporting documents that are highly inconsistent with the facts, the PRC Criminal Law also stipulates the mens rea of ‘negligence’, which, if it results in serious consequences, shall be sentenced to imprisonment of not more than three years or a fine. Such serious consequences include economic losses of more than 1 million yuan, among others.
China’s crackdown against securities market crimes is increasingly stringent. In 2022, the number of prosecuted securities crimes nearly doubled (93.4 per cent), compared with the previous year. According to the regulators, these securities-related cases reflect three major features:
- financial fraud and illegal information disclosure that seriously harm the interests of companies;
- market manipulation crimes becoming specialised, chained and circled, forming a hidden profit chain; and
- mergers and acquisitions becoming a frequent area of insider trading.
Therefore, information disclosure violation, market manipulation and insider trading are the three key illegal behaviours to be combated under the high-pressure situation of securities enforcement.
It is also worth noting the civil liability for securities violations in China. The PRC Securities Law has expanded the application of civil liability for securities violations that cause losses to investors, which in the worst cases may even lead to the bankruptcy of the offenders.
Furthermore, there have been notable developments in the judicial practice of securities misrepresentation-related cases in recent years, including the following:
- The threshold for the aggrieved investor to sue for compensation is formally and effectively lowered by clearly prohibiting the people’s court from ruling that the case is inadmissible on the sole ground that the alleged misrepresentation has not been subject to administrative penalties or recognised in the final and effective criminal judgment.
- Representative litigation in securities disputes has been well established and successfully applied in certain milestone cases in the past five years. This system includes ordinary representative litigation and special representative litigation. The former is characterised by the investors as plaintiffs having to ‘expressly join’ to be included in the proceedings, while the latter is characterised by being initiated by the investor protection agency, and the investors having to ‘implicitly join and expressly withdraw’ from the proceedings.
Enforcement proceedings for securities violations
Administrative enforcement procedures
The administrative enforcement procedures include preliminary investigation, case filing investigation, examination, pre-penalty and formal penalty.
Prior to filing a case, when the securities regulator receives a report or discovers evidence of securities violations, it first initiates the internal case filing procedures and conducts a preliminary investigation into the subject matter of the case. The investigation is mainly conducted by the Enforcement Bureau, which is usually responsible for retrieving data and information, mapping the overall background of the case and conducting interviews with relevant personnel, and so on. Upon completion of the preliminary investigation, if the investigating authority believes that the conduct in question is suspected of violating securities laws and regulations, it will formally file an investigation case against the offender and issue a notice of investigation.
After the case is filed, it will go through the investigation and examination stages and the hearing of the case will be conducted by the Administrative Sanctions Committee. If the securities regulator intends to impose administrative penalties, it will issue a ‘prior notification of administrative penalties’ to the alleged offender, after which the offender has the right to make representations and pleadings as well as to apply for a hearing. If a hearing is requested, it should be made within five days of service of the prior notification letter. If representations and pleadings are requested without a hearing, they should be made within five days of service of the prior notice. Specific opinions should be made within 15 days of service. If the securities regulator is of the opinion that the facts of the violation of the law have been ascertained, it will issue a formal ‘administrative penalty decision’. If the subject of investigation is not satisfied, they may further apply for administrative review or administrative litigation.
In addition, if the CSRC (and its delegated agencies) identifies criminal offences in the course of administrative proceedings, it will transfer the case to the judicial organs for further handling in accordance with the law.
Criminal enforcement procedures
The criminal enforcement procedures mainly involve three stages: investigation, examination and prosecution and trial.
At the investigation stage, the public security organs shall, upon discovering the facts of securities crimes or criminal suspects, file the cases for investigation within the scope of their jurisdiction. Any entity or individual, including the victims, has the right to report a case. During the investigation, the public security organs shall, within three days after the detention, submit a request for approval of arrest to the procuratorate. Under special circumstances, the detention time limit may be extended to 30 days. The procuratorate shall decide whether to approve the arrest within seven days after receiving the request for approval of arrest. If the suspect is arrested (in custody), the investigation period generally ranges from two to seven months. When the investigation is completed, the public security organs transfer the case file to the procuratorate for examination and prosecution.
At the examination and prosecution stage, if the suspect is in custody, the procuratorate shall decide whether to initiate a prosecution within one month. An extension of 15 days may be allowed for major or complex cases. When the evidence is insufficient, the procuratorate can return the case to the public security organ for one month of supplementary investigation. The supplementary investigation may be remanded no more than twice. Therefore, the maximum period for this stage is six and a half months (including a period of up to two months for supplementary investigations). If, after the second supplementary investigation, the procuratorate still deems that the evidence is insufficient, the procuratorate may decide not to prosecute. If the procuratorate considers that the facts are clear and the evidence is solid and sufficient, it shall decide to press charges.
At the trial stage, if the criminal suspect is in custody, the court normally announces its judgment on their public prosecution case within two to three months. For serious and complex cases, the time limit can be extended to a maximum of 20 months. If the defendant is not convinced by the judgment at first instance, they may appeal.
If the criminal suspect is on bail pending trial (i.e., not in custody), the public security organs, the procuratorates and the courts can each handle the case for not longer than one year.
Whistleblower reporting process
According to the Interim Provisions on Reporting of Securities and Futures Violations, the reporting process is as follows:
- whistleblowers report securities violations to the Securities and Futures Commission;
- the reporting centre conducts preliminary reviews and registers reports; and
- the CSRC decides whether to initiate an investigation and rewards the whistleblowers when the report is verified.
Means of administrative investigation and coercive measures
The means of administrative investigation include inspection, questioning of the party and witnesses, on-site investigation, testing, appraisal and retrieval of other evidence. To ensure the smooth progress of the investigation, the administrative organ can also take certain administrative coercive measures, including restricting the personal freedom of citizens and seizure of premises, facilities or property.
Statute of limitations
The statute of limitations for administrative penalties for an offence is two years with certain exceptions, which means that if the offence is not discovered by the regulator within two years, no further administrative penalty will be imposed. The PRC Administrative Penalties Law, newly revised in 2021, further adds a new five-year time limit for serious situations, namely, those causing harm or potential harm to the life, health and safety, and financial security of citizens and those that have harmful consequences.
The statute of limitations is calculated from the date on which the illegal act occurred; if the illegal act is continuous or ongoing, it starts from the date when the offences cease. The initiation of the administrative investigation or the whistleblower’s report of the offence to the regulators, which was then proven to be true, is usually considered as a sign of the discovery of offence by the regulators.
The ‘commitment made by parties’ rule (known as the administrative settlement rule before 2019) provides the means for a person or an entity subject to administrative investigation into its securities law offence (in particular, relatively minor offences) to avoid administrative liability by committing to correct their violations, compensate the affected investors for their losses and eliminate the damage or adverse effects. Once the commitment is accepted by the regulator, the regulator will cease the investigation without making a decision on the case or imposing any penalties on the alleged offender upon the fulfilment of the commitment.
That being said, the ‘commitment made by parties’ rule is applied very rigorously in China. There have been only two cases where the alleged offender’s commitment was accepted by the regulators.
Statutes of limitations
The PRC Criminal Law stipulates different statutes of limitations for prosecution and trial, depending on the severity of the offence. For securities crimes, the statute of limitation is usually determined based on the potential penalty for such offence. To be more specific, the statute of limitations is:
- five years if the offender could be penalised for a fixed-term imprisonment of less than five years;
- 10 years if the offender has the potential to be penalised for a fixed-term imprisonment of five to 10 years; and
- 15 years if the offender may be penalised for a fixed-term imprisonment of more than 10 years of imprisonment, life imprisonment or even a death sentence.
The limitation period is calculated from the date when the offence is committed or, if the offence continues, from the date of the cessation of such offence. If a new criminal offence is committed by the same offender before expiry of the statute of limitations for the old offence, the statute of limitations shall be interrupted and recalculated from the date of the new offence.
The statute of limitations shall not apply if the suspect escapes from investigation or trial after the case has already been filed or accepted by the public security bureau.
Non-prosecution compliance programme
Since 2020, China has set up compliance reform pilot programmes for companies involved in criminal proceedings. The establishment and improvement of a corporate compliance programme may exempt companies from criminal prosecution or allow companies to receive lenient treatment, under certain circumstances.
The SPP issued a model case in 2022 for a corporate compliance programme for the crime of insider trading and leaking inside information. In this example, the executive of a listed company disclosed a reorganisation plan and process to a friend on several occasions, who then made profits from that insider information. Before the procuratorate pressed a criminal charge, the listed company implemented a special compliance programme for the management of the insider information proposed by the procuratorate and the procuratorate successfully proposed to the court a lenient sentence imposed on the perpetrator (i.e., the executive based on the implementation of the compliance programme).
Types of administrative sanctions
Normally, administrative sanctions include administrative penalties and administrative supervision measures.
Administrative penalties include warnings, fines, confiscation of illegal gains or incomes, suspension or revocation of business licences, suspension of issuance and disposal of illegally held shares and other securities, among other things.
Administrative supervisory measures are usually not considered as administrative penalties and apply to cases where the misbehaviour does not constitute a violation or is not punishable. Administrative supervisory measures include ordering corrections, namely, adjustment to processes or commitment to not offend in the future, conducting supervisory interviews, issuing warning letters, recording information in an ‘integrity file’ and announcing the violation of laws and regulations or non-fulfilment of public commitments, recognising the perpetrator as an unqualified candidate (e.g., in the public bidding process), and so on.
Remedies for administrative sanctions
As mentioned above, after receiving the administrative penalty decision, there are two main legal remedies for the offenders. First, if a person receiving notice of the administrative penalty for reason of their securities law offence challenges the notice, they may consider filing an application for administrative review to the CSRC within 60 days after receiving the notice, and the administrative review will be conducted by the Department of Legal Affairs of the CSRC.
The other remedy is administrative litigation. If the party refuses to accept the administrative penalty, they may file an administrative legal action within six months of receipt of the notice on the penalty; however, if the penalty has been assessed in the administrative review process, the party must file the administrative litigation within 15 days of receipt of the CSRC’s decision on the administrative review. The judgment on an administrative action by the first instance court is generally appealable.
It is also worth noting that the filing of an administrative litigation does not necessarily cease or affect the enforcement of the administrative penalty – until an adverse court decision is made on the administrative penalty. In some instances, the party may apply for retrial of the second instance judgment if certain conditions are capable of being satisfied.
China adopts a two-tier trial system for criminal proceedings, whereby the defendant has the right to appeal the first instance judgment or order, and the procuratorate also has the option of challenging the judgment or order.
The appellate court shall not impose a more severe sentence on the defendant, unless the procuratorate has duly filed a protest as well.
In the same way as administrative litigation, the defendant may request a retrial after a final court judgment is made when certain conditions are satisfied.
This chapter only provides a brief introduction to securities enforcement in China. In view of the complexity of the procedural and substantive issues involved in securities enforcement, readers are encouraged to contact the authors for specific information.
 Allen Fu, Sophia Feng and Hanjie Chen are partners at Fangda Partners. The authors would like to thank Eva Xu and Fang Wang (associates) and Toria Cao and Qian Li (trainee associates) from Fangda Partners for their help with this chapter.
 Article 78, PRC Securities Law.
 According to Article 197 of the PRC Securities Law, a person with information disclosure obligations who fails to file the relevant report or perform its information disclosure obligation in accordance with the Law shall be ordered to take corrective action, warned and fined not less than 500,000 yuan nor more than 5 million yuan; and the directly liable executive in charge and other directly liable persons shall each be warned and fined not less than 200,000 yuan nor more than 2 million yuan. If the issuer’s controlling shareholder or actual controller organises or instigates the commission of the violation, or conceals the relevant matters, resulting in the occurrence of either of the aforesaid circumstances, the controlling shareholder or actual controller shall be fined not less than 500,000 yuan nor more than 5 million yuan; and the directly liable executive in charge and other directly liable persons shall each be fined not less than 200,000 yuan nor more than 2 million yuan. Where a report filed or the information disclosed by a person with information disclosure obligations contains any false or misleading statement or material omission, the person shall be ordered to take corrective action, warned and fined not less than 1 million yuan nor more than 10 million yuan; and the directly liable executive in charge and other directly liable persons shall be warned and each be fined not less than 500,000 yuan nor more than 5 million yuan. If the issuer’s controlling shareholder or actual controller organises or instigates the commission of the aforesaid violation, or conceals the relevant matters, resulting in the occurrence of any of the aforesaid circumstances, the controlling shareholder or actual controller shall be fined not less than 1 million yuan nor more than 10 million yuan; and the directly liable executive in charge and other directly liable persons shall each be fined not less than 500,000 yuan nor more than 5 million yuan.
 Article 53, PRC Securities Law.
 According to Article 191 of the PRC Securities Law, where it constitutes insider trading, the person shall be ordered to dispose of the illegally held securities and fined not less than one nor more than 10 times its illegal income therefrom, which shall be confiscated, or if there is no such illegal income or the illegal income is less than 500,000 yuan, fined not less than 500,000 yuan nor more than 5 million yuan. If an entity conducts insider trading, the directly liable executive in charge and other directly liable persons shall also be warned and each be fined not less than 200,000 yuan nor more than 2 million yuan. If any staff member of the securities regulatory agency of the State Council conducts insider trading, a heavier punishment in the range shall be imposed on the staff member.
 Article 55, PRC Securities Law. And according to Article 192 of the PRC Securities Law, whoever manipulates the securities market shall be ordered to dispose of the illegally held securities and fined not less than one nor more than 10 times its illegal income therefrom, which shall be confiscated, or if there is no such illegal income or the illegal income is less than 1 million yuan, fined not less than 1 million yuan nor more than 10 million yuan. If an entity manipulates the securities market, the directly liable executive in charge and other directly liable persons shall also be warned and each be fined not less than 500,000 yuan nor more than 5 million yuan.
 Article 160, PRC Securities Law.
 According to Article 213 of the PRC Securities Law, where a securities service institution fails to act with due diligence, it shall be ordered to take corrective action and fined not less than one nor more than 10 times its business revenue therefrom, which shall be confiscated, or if there is no such business revenue or its business revenue is less than 500,000 yuan, fined not less than 500,000 yuan nor more than 5 million yuan; and if the circumstances are serious, it shall be suspended or prohibited from engaging in securities services. The directly liable executive in charge and other directly liable persons shall be warned and each be fined not less than 200,000 yuan nor more than 2 million yuan.
 Article 36, PRC Securities Law. And according to Article 186 of the PRC Securities Law, whoever illegally transfers securities shall be ordered to take corrective action and warned, the violator’s illegal income shall be confiscated, and the violator shall be fined no more than the equivalent value of the securities purchased or sold.
 Article 44, PRC Securities Law. And according to Article 189 of the PRC Securities Law, whoever illegally engages in short-term transaction shall be warned and fined not less than 100,000 yuan nor more than 1 million yuan.
 Article 161, PRC Criminal Law. And according to Article 6 of the Docketing and Prosecution Criteria II (Criteria II) promulgated by the SPP and the MPS, ‘serious circumstances’ under Article 161 of the PRC Criminal Law include the following: (1) causing direct economic losses of more than 1 million yuan; (2) falsely increasing or decreasing assets, income or profit by more than 30 per cent; (3) disclosing loss as profit or vice versa; and (4) repeatedly committing information disclosure violations.
 Article 180, PRC Criminal Law. According to Article 30 of Criteria II, ‘serious circumstances’ under Article 180 of the PRC Criminal Law include the following: (1) profiting over 500,000 yuan; (2) trading over 2 million yuan; (3) engaging in insider trading or leaking insider information more than three times within two years; and (4) explicitly or implicitly advising more than three persons.
 Article 182, PRC Criminal Law. According to Article 34 of Criteria II, ‘serious circumstances’ under Article 182 of the PRC Criminal Law include the following: (1) profiting more than 1 million yuan; (2) trading more than 10 million yuan by inducing investors, providing public evaluation, perpetrating false major events or controlling the generation and disclosure of information; (3) holding or actually controlling, alone or by conspiracy, more than 10 per cent of the total tradable securities through a concentration of funds, shareholding or information advantages, and reaching more than 20 per cent of the total trading volume for 10 consecutive trading days; and (4) trading among accounts under the same actual control or colluding with others in mutual securities trading, and reaching more than 20 per cent of the total trading volume for 10 consecutive trading days, among others. According to Article 4 of the Interpretation of the SPC and the SPP on Criminal Cases regarding Manipulation of Securities or Futures Market, ‘particularly serious circumstances’ under Article 182 of the PRC Criminal Law include the following: (1) profiting more than 10 million yuan; (2) trading more than 50 million yuan by inducing investors, providing public evaluation, perpetrating false major events, or controlling the generation and disclosure of information; (3) holding or actually controlling, alone or by conspiracy, more than 10 per cent of the total tradable securities through a concentration of funds, shareholding or information advantages, and reaching more than 50 per cent of the total trading volume for 10 consecutive trading days; and (4) trading among accounts under the same actual control or colluding with others in mutual securities trading, and reaching more than 50 per cent of the total trading volume for 10 consecutive trading days, among others.
 Article 229, PRC Criminal Law. According to Article 73 of Criteria II, ‘serious circumstances’ under Article 180 of the PRC Criminal Law include the following: (1) causing direct economic losses of more than 500,000 yuan; (2) obtaining illegal income of more than 100,000 yuan; and (3) being punished more than twice by administrative authorities in the past two years.
 Article 2, the current Certain Provisions on Misrepresentation 2022.
 Article 64, PRC Administrative Penalty Law.
 Article 31, Measures for the Administrative Penalties for Securities and Futures Violations.
 Article 91, PRC Criminal Procedure Law.
 Article 172, PRC Criminal Procedure Law.
 Article 175, PRC Criminal Procedure Law.
 Article 176, PRC Criminal Procedure Law.
 Article 87, PRC Criminal Law.
 Article 46, PRC Administrative Litigation Law.
 Article 45, PRC Administrative Litigation Law.
 Article 237, PRC Criminal Procedure Law.