China Securities Regulatory Commission issues basic rules to standardise administrative penalty discretion in securities and futures enforcement

The China Securities Regulatory Commission (CSRC) issued the Basic Rules on Administrative Penalty Discretion, setting out unified benchmarks for how the CSRC and its dispatched agencies should determine penalty outcomes in administrative enforcement cases. The framework aims to make discretion more transparent and consistent while operationalising a stricter enforcement approach. The 25-article rules define core principles and policies for exercising discretion and establish a ladder of outcomes ranging from no penalty and exemption through mitigated, lighter, general and heavier penalties, with specified circumstances for applying each tier. For fines with statutory ranges, the rules introduce tiered standards within the legal band, and they also address how to weigh cases where multiple mitigating and aggravating circumstances apply. Further provisions cover confiscation of illegal gains, treatment of multiple independent violations through cumulative penalties, approaches to joint violations through an “overall assessment then individual penalties” methodology with carve-outs where the law sets separate penalty provisions, and requirements for penalising directly responsible individuals. Implementation measures include stepped-up communication and interpretation, training for enforcement staff across the CSRC and its dispatched agencies, and strengthened supervision and guidance over how dispatched agencies exercise penalty discretion, alongside further work to build out a more complete CSRC administrative penalty rule system.