China Securities Regulatory Commission (CSRC) in Beijing Photo:VCG

The China Securities Regulatory Commission (CSRC), the country's top securities regulator, on Tuesday pledged to further strengthen the rule of law in the capital market to support its high-quality development, consolidate the market's fundamentals, stabilize expectations and benefit it in the long term.

Experts noted that the CSRC statement came ahead of the annual two sessions, where the stabilization of the capital market is expected to be in the spotlight. It also highlights the country's determination to promote the healthy development of the capital market and protect investors' rights and interests, they said.

The CSRC held a symposium on Tuesday, listening to opinions and suggestions on improving the basic system of the capital market and strengthening the protection of the rule of law.

Participants recognized the breakthroughs in recent years in building the rule of law in the capital market, noting that it is necessary to adhere to the direction of market-oriented and law-based reforms.

Participants stressed the need to accelerate legislation in various fields, such as the regulation of listed companies, securities firms and investment funds. 

Related departments should implement civil compensation remedies, and also formulate judicial interpretations related to civil compensation for insider trading and market manipulation, to protect the legitimate rights and interests of investors, especially small and medium-sized investors.

The participants also suggested further improving the securities and futures law enforcement and judicial systems with Chinese characteristics, and strengthening efficient coordination between law enforcement and the judiciary, in order to enhance the effectiveness of law enforcement on a "zero-tolerance" basis.

"The rule of law in the capital market will be the focus of the upcoming two sessions, and related proposals are expected to be put forward to correct some blind spots in the legal system," Dong Shaopeng, a senior research fellow at the Chongyang Institute for Financial Studies at Renmin University of China, told the Global Times on Wednesday.

Dong noted that this meeting is also of great significance to legal action in the capital market that has been carried out since the end of last year, and it also reflects the attitude of the relevant authorities to resolutely deal with illegal acts.

CSRC chairman Wu Qing said during the meeting that the CSRC will carefully study the opinions and suggestions put forward by the participants, and work together with the relevant parties to improve the legal system, enhance the effectiveness of law enforcement and strengthen judicial protection.

In the first press briefing in the Year of the Dragon held on Friday, the CSRC vowed that it will adhere to an investor-centered approach, scrutinize enterprises that are to be listed, and severely punish those who violate the law and infringe upon the interests of investors, so as to improve the quality of listed companies.

The regulator vowed to build a "penetrating" screening system to identify and crack down on market manipulation and insider trading. Penalties for such practices will increase, and the cost of breaking the law will also be higher, it said.