China increases data security scrutiny on overseas-listed companies
Updated 12:13, 07-Jul-2021
China strengthens data security scrutiny and cracks down on illegal securities activities. /CFP

China strengthens data security scrutiny and cracks down on illegal securities activities. /CFP

China pledged to speed up revising regulations on data security regarding company's issuance and listing shares overseas, according to a notice published on Tuesday.

The notice, published by the General Office of the Communist Party of China (CPC) Central Committee along with the General Office of the State Council, also stressed on improvement of laws and regulations of cross-border data flow and management of confidential information.

It specifies the targets in upgrading the securities law-enforcement and judicial systems by 2022 and 2025. The targets include effectively curbing the frequent occurrence of major illegal and criminal cases and making notable advances in the transparency, standardization, and credibility in the securities law-enforcement and judicial system.

In terms of law enforcement cracking down on illegal securities activities, the document calls for improving investigation, inspection, and trial mechanisms.


It also pressed on overseas-listed companies in taking up responsibility in safeguarding their cybersecurity.

The notice said that China will increase crackdown on illegal activities in the securities sector in facilitating high-quality development of the capital market.

It referred to strengthening oversight on overseas-listed Chinese companies and further deepening cooperation on cross-border audit supervision.

It also called for the establishment of law enforcement alliances to combat crimes in the cross-border securities sector.

Zero tolerance

For a long time, due to the shortcomings in the system design and the subsequent low cost of committing a crime, listed firms have conducted illegal actions such as financial fraud, insider trading, and market manipulation, Yi Huiman, chairman of the China Securities Regulatory Commission, told Xinhua in an interview on Tuesday.

China's capital market has been undergoing profound structural changes in recent years, Yi said. He added that the document's release would provide an essential guarantee for comprehensively deepening capital market reform and promoting its high-quality development.

It is vital to accelerate the construction of a more mature capital market system and significantly raise the violation cost in the capital market, Yi said. He added it is also essential to maintain the capital market order and protect investors' lawful rights and interests.

The document demonstrates China's zero-tolerance policy for illegal behaviors, Yi said.

The country would strictly and promptly investigate and deal with major criminal cases such as fraudulent issuance, market manipulation, insider trading, and fabricating and disseminating false information, he added.

The notice came following a regulatory order for Chinese ride-hailing giant Didi Chuxing to be removed from app stores over user privacy violation. Didi's shares plunged as much as 30 percent in pre-market trade on Tuesday following its mega $4.4 billion listing on the New York Stock Exchange last week.

(With input from Xinhua)

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