Heavy! The upper limit of 200,000 yuan was cancelled for the letter-wearing fraud fine, and the criminal law amendment was passed!

　　On December 26th, the 24th meeting of the 13th the National People’s Congress Standing Committee (NPCSC) deliberated and adopted the 11th Amendment to the Criminal Law (hereinafter referred to as the Amendment), which will be officially implemented on March 1st, 2021.

　　Looking at this amendment, it involves five major points of the capital market: 1. For fraudulent issuance, the amendment raises the maximum term of imprisonment from 5 years to 15 years, and changes the fine for individuals from 1%~5% of illegally raised funds to "concurrently fine", cancels the upper limit of 5%, and increases the fine for units from 1%~5% of illegally raised funds to 20%~1 times.

　　 2. For information disclosure fraud, the amendment will increase the maximum sentence of the relevant responsible personnel from 3 years to 10 years, and the fine amount will be changed from 20,000 yuan to 200,000 yuan to "fine concurrently", and the upper limit of 200,000 yuan will be cancelled.

　　 3. Strengthen the criminal accountability of "key minority". Incorporate the controlling shareholder and actual controller into the scope of criminal law regulation, such as organizing, instigating fraudulent issuance, making false information disclosure, and concealing relevant matters by controlling shareholder and actual controller, which leads to the disclosure of false information by the company.

　　 4. Compacting the "gatekeeper" responsibilities of intermediaries such as sponsors. The sponsor is regarded as the subject of the crime of providing false documents and the crime of issuing documents with great inaccuracy, and the criminal responsibility shall be investigated for this crime.

　　 5. With reference to the provisions of the new securities law, in view of the new manipulation situation in the market, it is further clear that criminal responsibility shall be investigated for new market manipulation behaviors such as "fraudulent transaction manipulation", "confusing transaction manipulation" and "hat grabbing manipulation".

　　The CSRC pointed out that this revision of the criminal law is another major legislative activity involving the capital market after the completion of the revision of the securities law, which shows the firm determination of the state to "zero tolerance" against securities and futures crimes, and has far-reaching significance for effectively raising the illegal cost of securities, protecting the legitimate rights and interests of investors, maintaining market order, promoting the reform of the registration system, and ensuring the stable and healthy development of the capital market.

　　Greatly improve the criminal punishment of securities and futures crimes.

　　 According to the CSRC, the revision of the criminal law adheres to the problem orientation, highlights key points, and aims at preventing and resolving financial risks, ensuring financial reform and maintaining financial order. It is compatible with the reform of the registration system with information disclosure as the core and is linked with the revision of the securities law, which greatly improves the criminal punishment for four types of securities and futures crimes, such as fraudulent issuance, false information disclosure, false certification documents provided by intermediaries and market manipulation. To create a standardized, transparent, open, dynamic and resilient capital,

　　Greatly increase the penalties for crimes such as fraudulent issuance and information disclosure fraud.Illegal and criminal acts such as fraudulent issuance and information disclosure fraud are the "cancer" of the capital market, and the amendment has greatly strengthened the criminal crackdown on the above crimes. For fraudulent issuance, the amendment will raise the upper limit of imprisonment from 5 years to 15 years, and modify the fine for individuals from 1%~5% of illegally raised funds to "concurrently fine", cancel the upper limit of 5%, and increase the fine for units from 1%~5% of illegally raised funds to 20%~1 times. For information disclosure fraud, the amendment will increase the maximum sentence of the relevant responsible personnel from 3 years to 10 years, and the fine amount will be changed from 20,000 yuan to 200,000 yuan to "combined fine", and the upper limit of 200,000 yuan will be cancelled.

　　Strengthen the investigation of criminal responsibility of "key minorities" such as controlling shareholders and actual controllers.In practice, controlling shareholders and actual controllers often play an important role in cases such as fraudulent issuance and information disclosure fraud. The amendment strengthens the accountability of such subjects, and clearly includes the behaviors of controlling shareholders and actual controllers, such as organizing and instigating fraudulent issuance, making false information disclosure, and concealing relevant matters by controlling shareholders and actual controllers, which leads to the disclosure of false information by the company, into the scope of criminal law regulation.

　　Compacting the "gatekeeper" duties of intermediaries such as sponsors.Intermediaries such as sponsors are the "gatekeepers" of the capital market, and their diligence is very important for the healthy development of the capital market. The amendment clearly regards the sponsor as the subject of the crime of providing false documents and the crime of issuing documents that are grossly inaccurate, and applies this crime to investigate criminal responsibility. At the same time, for lawyers, accountants and other intermediaries who produce false documents in securities issuance and major asset trading activities, if the circumstances are particularly serious, a higher sentence is clearly applicable, and the maximum sentence can be 10 years in prison.

　　Maintain effective connection with the revision of the securities law.On the one hand, depository receipts and other securities legally recognized in the State Council are included in the scope of regulation of fraudulent issuance crimes, providing sufficient legal basis for cracking down on fraudulent issuance of depository receipts and other securities in the future; On the other hand, with reference to the provisions of the new securities law, in view of the new manipulation situation in the market, it is further clear that criminal responsibility should be investigated for new market manipulation behaviors such as "fraudulent transaction manipulation", "confusing transaction manipulation" and "hat-grabbing manipulation".

　　We will speed up the revision and improvement of criminal filing and prosecution standards.

　　Regarding the follow-up work of the amendment, the CSRC indicated that in the next step, it will take the opportunity of earnestly implementing Amendment 11 of the Criminal Law as an opportunity to accelerate the revision and improvement of the standards for criminal filing and prosecution, strengthen the publicity and education on the content of Amendment 11 of the Criminal Law, continuously deepen the cooperation with the judicial organs, adhere to the "zero tolerance" to crack down on various securities and futures crimes such as fraudulent issuance and information disclosure, effectively raise illegal costs, effectively protect the legitimate rights and interests of investors, and fully guarantee them.

　　Source: Issued by China Securities Regulatory Commission, Securities Times Network