The China Securities Regulatory Commission (CSRC) has deployed a 2026 special action to crack down on and prevent financial fraud by listed companies, with an emphasis on earlier detection, stronger prevention and improved long-term mechanisms. The initiative is designed to link up case discovery, punishment, delisting and investor protection. Since the State Council General Office forwarded a multi-agency opinion on comprehensive prevention and punishment of capital-market financial fraud in July 2024, the CSRC has already run two rounds of special actions, focusing on sham trade, misuse of the gross method to inflate revenue, and earnings manipulation through revenue recognition timing. These efforts produced 263 case leads (including controlling shareholder fund misappropriation), 107 administrative penalty decisions and combined fines and confiscations of more than CNY 3.3bn, alongside enforcement in cases including Zitian Technology, Dongfang Group and Gaohong Shares, and the compulsory delisting of 18 companies for serious fraud. The 2026 action sets four priority workstreams: strengthening the detection network using enhanced warning-signal monitoring, big-data queries and AI large-model applications, and building dedicated off-site monitoring and third-party collusion monitoring centres; tightening penalties including delisting for fraud, repayment of misappropriated funds, continued liability after delisting and referrals to public security authorities for suspected fraudulent issuance, unlawful disclosure and breaches of trust; reinforcing gatekeeping by controlling shareholders, board secretaries, independent directors, audit committees and intermediaries, with leniency options for intermediaries that proactively report fraud; and improving integrated enforcement, coordinated publication of enforcement information, investor protection institution-led representative and supported litigation, and cross-department information sharing and lead-transfer mechanisms for third-party-assisted fraud.
China Securities Regulatory Commission 2026-04-24
China Securities Regulatory Commission launches 2026 special campaign to detect and punish financial fraud by listed companies
The China Securities Regulatory Commission has launched a 2026 special action to crack down on financial fraud by listed companies, focusing on earlier detection, stronger deterrence and improved mechanisms linking case discovery, punishment, delisting and investor protection. The initiative prioritises enhanced monitoring using big data and artificial intelligence, tougher penalties including delisting and continued liability, reinforced gatekeeping by controlling shareholders, directors and intermediaries, and more integrated enforcement and investor protection.