Abstract
On 28 December 2019, the revised People’s Republic of China (PRC) Securities Law was passed by the Standing Committee of National People’s Congress. The Law came into effect on 1 March 2020 and has been considered as the biggest overhaul of China’s securities regulatory regime since the Law was first enacted in 1998. It has 226 articles covering every aspect of securities issuance and trading in China, including investor protection, information disclosure, harsher penalties for fraudulent activity, and intermediary management. The PRC Securities Law 2020 has formally endorsed the implementation of the “registration-based IPO regime” across many segments of the Chinese capital markets. It will remove the excessive power of the securities regulator in deciding the outcome of IPOs, as in the future, any listing applicants who satisfy the formalities and pre-set standards will obtain a listing without the extra censorship and administrative approval from the securities regulator. The PRC Securities Law 2020 has created a disclosure-based regulatory system, introducing harsh penalties for illegal activities such as fraudulent issuance, misrepresentation, and false information disclosure, in a response to high-profile scandals of securities fraud in some Chinese companies such as Kangmei Pharmaceutical and the US-listed Luckin Coffee. The PRC Securities Law 2020 offers better protection for retail investors in terms of the special treatment of ordinary investors (distinct from professional investors), the delegation of shareholder rights, as well as the US-style class action regime.
| Original language | English |
|---|---|
| Pages (from-to) | 237-239 |
| Journal | BUTTERWORTHS JOURNAL OF INTERNATIONAL BANKING AND FINANCIAL LAW |
| Volume | 36 |
| Publication status | Published - 2021 |
Keywords
- PRC Securities Law
- China
- Capital Market
- Stock Market
- Securities Regulation
- China Securities Regulatory Commission
- IPO
- Initial Public Offerings
- Luckin Coffee
- Class Action
