The China Securities Regulatory Commission (CSRC) has opened a consultation on draft guidance for advance compensation in securities markets under Article 93 of the Securities Law. The proposal seeks to make the existing mechanism more transparent and predictable as a means of resolving securities disputes involving groups of investors quickly. It takes forward previously outlined plans to clarify who can provide advance compensation and how it should be implemented. The draft would clarify eligible participants, the mechanism’s basic role and its main implementation procedures. It would also define how investor protection institutions can provide services under an entrusted mandate, the scope of those services and coordination arrangements among relevant entities. To encourage advance compensation, the CSRC could take its provision into account, in accordance with applicable laws and rules, when reviewing administrative licensing applications, determining administrative penalties and conducting securities and futures market integrity supervision.
China Securities Regulatory Commission consults on advance investor compensation procedures and regulatory incentives
The China Securities Regulatory Commission is consulting on draft guidance to clarify participants and procedures for advance investor compensation under the Securities Law. The proposal would define investor protection institutions’ entrusted services and coordination arrangements. Advance compensation could also be considered in licensing reviews, administrative penalty decisions and market integrity supervision.