The Office of the Financial Commission recently released 11 financial reform measures, including the “Opinions on Strengthening Administrative Penalties for Financial Violations”.
A reporter from China Securities News learned from relevant departments that the People ’s Bank of China, together with the Ministry of Finance, the China Banking Regulatory Commission, the China Securities Regulatory Commission, and the Foreign Exchange Bureau have studied and formulated the “Opinions” (hereinafter referred to as “Opinions”), under the current legal framework, adhere to the principle of considerable punishment, further clarify the punishment standards, and increase punishment.
According to reports, the main contents of the “Opinions” include five aspects: First, it is clear that financial violations can be punished in sequence . In order to strengthen the punishment of financial institutions for long-term and repeated implementation of similar financial violations, the “Opinions” clarify that the financial management department shall comprehensively consider the nature of the violations, the specific circumstances, and the consequences of the actions in accordance with the current law. Penalties for violations accumulatively accumulated .
The second is to further clarify the calculation standard of illegal income . In practice, some financial violations are huge in amount and the circumstances are serious, but the amount of violations calculated after deducting costs is small, resulting in a penalty amount that does not match the severity of the violation. The “Opinions” make it clear that the financial management department can, based on the circumstances of the case and the principle of equivalence of fines, account all income obtained by financial institutions for financial violations as illegal income .
The third is to severely punish financial violations that are repeatedly prohibited, according to law . For financial institutions that have been punished by the financial management department for financial violations, but do not repent and still commit similar violations, the “Opinions” make it clear that the financial management department can give administrative penalties more severely according to law.
Fourth, strictly investigate the illegal responsibility of intermediaries . For intermediaries that assist financial institutions in committing illegal acts or fail to perform their due diligence in the process of financial institutions, and the circumstances are serious, the “Opinions” make it clear that financial management departments should make full use of qualification penalties to suspend and revoke their business qualifications and permits.
Fifth is to implement the “double penalty system” . The “Opinions” clearly stipulate that while strictly punishing the responsibilities of the unit, in accordance with the law, the individuals responsible for violations of the law shall be held accountable for personal punishment, and punishment measures may be taken according to law for a certain period of time until the market is banned for life.
The second is to further clarify the calculation standard of illegal income . In practice, some financial violations are huge in amount and the circumstances are serious, but the amount of violations calculated after deducting costs is small, resulting in a penalty amount that does not match the severity of the violation. The “Opinions” make it clear that the financial management department can, based on the circumstances of the case and the principle of equivalence of fines, account all income obtained by financial institutions for financial violations as illegal income .
The third is to severely punish financial violations that are repeatedly prohibited, according to law . For financial institutions that have been punished by the financial management department for financial violations, but do not repent and still commit similar violations, the “Opinions” make it clear that the financial management department can give administrative penalties more severely according to law.
Fourth, strictly investigate the illegal responsibility of intermediaries . For intermediaries that assist financial institutions in committing illegal acts or fail to perform their due diligence in the process of financial institutions, and the circumstances are serious, the “Opinions” make it clear that financial management departments should make full use of qualification penalties to suspend and revoke their business qualifications and permits.
Fifth is to implement the “double penalty system” . The “Opinions” clearly stipulate that while strictly punishing the responsibilities of the unit, in accordance with the law, the individuals responsible for violations of the law shall be held accountable for personal punishment, and punishment measures may be taken according to law for a certain period of time until the market is banned for life.
It is understood that the financial management department is actively cooperating with the legislature to promote the revision of the People ’s Bank of China Law, Commercial Bank Law, Insurance Law, Anti-Money Laundering Law and other financial laws and regulations. The newly revised Securities Law has greatly increased the standard of administrative punishment, and at the same time strengthened the investigation of civil and criminal responsibilities of illegal subjects. In the revision of relevant financial laws and regulations, the financial management department will coordinate and promote the improvement of the legal liability system for financial violations, increase the investigation of civil, administrative, and criminal responsibilities of illegal subjects, and effectively protect the legitimate rights and interests of financial consumers.
(Originally titled “Five Departments Study and Formulate” Opinions on Strengthening Administrative Penalties for Financial Illegal Acts “, adhere to the principle of excessive penalties and increase penalties”)