China steps up fight against abuse of power by stock market regulators

SHANGHAI (Reuters) – China’s corruption watchdog will work with the country’s stock market commission to combat graft and abuse of power following a spate of violations in which companies pay officials to gain regulatory approvals, it said on Sunday.

China is stepping up efforts to fight corruption in the securities market as part of a campaign to reduce financial risks following a number of irregularities involving the misuse of vetting power, according to an article published by the Central Commission for Discipline Inspection (CCDI) on Sunday.

It said one official was recently found to have received large cash bribes in exchange for helping a listed company win approval from the China Securities Regulatory Commission (CSRC) to apply for financing.

China’s top securities regulator Liu Shiyu said during a recent meeting that the entire supervisory system should learn from past cases of corruption and defend the disciplinary “red line”, the CCDI said.

CCDI and the Communist Party Committee of the China Securities Regulatory Commission (CSRC) will work to strengthen oversight over the use the vetting power in the securities market and ensure financial markets serve the real economy rather than personal interests, the article said.

Regulators with vetting power are particularly prone to corruption because decisions like the issuing of shares or the granting of business licenses have a direct impact on the interests of market players, the report said, citing a CCDI official.

The graftbusting body uncovered 135 individual cases of disciplinary violations at the CSRC in the five years leading up to the 19th Communist Party congress in late 2017, and it has identified another 33 cases since then, it said.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.