The China Securities Regulatory Commission issued revised rules for classifying and evaluating securities companies, renaming the regime as the Securities Company Classification Evaluation Regulations and applying the changes from 22 August 2025. The amendments are framed as targeted refinements to the existing system to sharpen incentives and constraints, including a “support the best, restrict the worst” approach and support for differentiated development by small and mid-sized firms. The evaluation framework is restructured around three dimensions: risk management capability, sustained compliance status, and business development and function performance, with corresponding adjustments to bonus points and special evaluations. Business-development bonus indicators are refined to steer firms toward higher-quality growth, including stronger professional service capability in areas such as attracting medium- and long-term funds and wealth management, and the scope of key business bonus points is expanded to encourage differentiated strategies. On discipline, the rules broaden circumstances for direct downgrades in classification ratings, increase deduction points for certain “qualification penalty” disciplinary actions, and recalibrate deduction scoring for administrative penalties with more granular bands; the rules also set out handling for special cases, including reduced deductions where a firm under suspected misconduct applies an administrative enforcement commitment and undertakes advance compensation. The revisions follow a public consultation launched on 20 June, after which feedback was reviewed and incorporated. The CSRC indicated it will focus next on implementation and on further improving the sector classification-based supervisory framework.
China Securities Regulatory Commission 2025-08-22
China Securities Regulatory Commission revises securities company classification evaluation rules, refocusing metrics and strengthening downgrade and penalty scoring
The China Securities Regulatory Commission has revised the Securities Company Classification Evaluation Regulations, effective 22 August 2025, to enhance incentives and constraints for securities firms. The updated framework emphasizes risk management, compliance, and business development, with refined bonus indicators and expanded downgrade criteria. Following public consultation, the CSRC will focus on implementing these changes and further refining the supervisory framework.