China Securities Regulatory Commission issued the “Implementation Rules for Administrative Penalties in Cases of Illegal Transfer of Securities”

The Zhitong Finance App learned that on October 19, the China Securities Regulatory Commission issued the “Implementation Rules on Administrative Penalties for Illegal Securities Transfer Cases”, which will take effect on December 1, 2026. The Rules consist of 18 articles. Article 1 is the basis for enactment. Sections 2 to 7 are the “Determination” section, which successively clarifies the meaning and specific circumstances of “transferring securities”, “transferring securities within the restricted transfer period” and “transferring shares does not comply with the law, administrative regulations, and the regulations of the securities regulatory agency under the State Council” as stipulated in Article 186 of the Securities Law, as well as the determination of offenders who acted in concert. Articles 8 to 17 are the “discretionary” section, which distinguishes the four types, sets different levels of discretion, and makes enumerative provisions on the circumstances of punishment adjustment, and makes indicative provisions on the circumstances of combined punishment and priority punishment, situations where adjustments are applied, and market prohibitions.

The original text is as follows:

Enforcement Rules for Administrative Penalties in Cases of Illegal Transfer of Securities

Article 1. These rules are formulated in accordance with the provisions of the “Administrative Penalty Law of the People's Republic of China”, the “Company Law of the People's Republic of China” (hereinafter referred to as the “Company Law”), the “Securities Law of the People's Republic of China” (hereinafter referred to as the “Securities Law”), and the “Basic Rules on Discretionary Administrative Penalties of the China Securities Regulatory Commission” (hereinafter referred to as the “Basic Discretion Rules”) in order to regulate the determination and discretion of administrative penalties in cases of illegal transfer of securities, and effectively protect the legitimate rights and interests of investors.

Article 2. The transfer of securities referred to in these Rules refers to the transfer of securities through centralized bidding transactions, bulk transactions, agreement transfers, etc., or in a non-transactional form.

The illegal transfer of securities referred to in these rules refers to an illegal act that violates the provisions of Article 36 of the Securities Law, transfers securities within the restricted transfer period, or does not comply with the law, administrative regulations, and the regulations of the China Securities Regulatory Commission (hereinafter referred to as the China Securities Regulatory Commission), and shall be subject to administrative punishment in accordance with section 186 of the Securities Law.

Article 3 If the perpetrator transfers securities in any of the following circumstances and violates the provisions of Article 36 (1) of the Securities Law, it is a “transfer of securities within the restricted transfer period” as stipulated in section 186 of the Securities Law:

(1) Transferring shares during the restricted transfer period for shares issued before the initial public offering in violation of the provisions of Article 160 (1) of the “Company Law” and other legal provisions;

(2) Directors and senior management personnel transferred shares during the limited transfer period in violation of Article 160 (2) of the Company Law on limiting the transfer period;

(3) The buyer transferred shares during the restricted transfer period in violation of section 75 of the Securities Law;

(4) Other situations where securities are transferred within the restricted transfer period in violation of legal provisions.

Article 4. If the perpetrator transfers shares and does not comply with administrative regulations or the regulations of the China Securities Regulatory Commission in terms of holding period or sale period, and violates the provisions of Article 36 (2) of the Securities Law under any of the following circumstances, “the transfer of shares does not comply with the law, administrative regulations, and the regulations of the securities regulatory agency under the State Council” as stipulated in Article 186 of the Securities Law:

(1) Shareholders and actual controllers holding 5% or more of the shares (hereinafter collectively referred to as major shareholders) transferred shares in violation of the provisions of Article 7 and Article 11 (2) of the “Interim Measures on the Administration of Shareholders' Shareholdings Reduction in Listed Companies” (hereinafter referred to as the “Administrative Measures for Shareholder Reduction”);

(2) The controlling shareholder or actual controller transferred shares in violation of the provisions of Articles 8, 10, and 11 (1) of the “Administrative Measures on Shareholders' Shareholders' Shareholdings Reduction”;

(3) Directors and senior management transferred shares in violation of the provisions of Articles 4 and 13 of the “Rules for Managing the Company's Shares Held by Directors and Senior Managers of Listed Companies and Their Changes” (hereinafter referred to as the “Rules on Changes in Shareholding by Directors and Executives”);

(4) The specific target transfers shares in violation of the provisions of Article 59 and Article 63 of the “Administrative Measures on Issuance and Registration of Listed Companies' Securities” and Article 4 of the “Administrative Measures on Convertible Corporate Bonds”;

(5) The specific target transfers shares in violation of the provisions of Article 48 of the “Administrative Measures on Securities Issuance and Registration of Companies Listed on the Beijing Stock Exchange”;

(6) The specified target transfers shares in violation of the provisions of Article 47 of the “Administrative Measures on Major Asset Reorganization of Listed Companies”;

(7) Other situations where transferred shares do not comply with administrative regulations or the regulations of the China Securities Regulatory Commission in terms of holding period and sale time.

Article 5. If the perpetrator transfers shares and does not comply with laws, administrative regulations, and the provisions of the China Securities Regulatory Commission in terms of the quantity sold, disclosure of information, etc., and has one of the following circumstances and violates the provisions of Article 36 (2) of the Securities Law, “the transfer of shares does not comply with the law, administrative regulations, and the regulations of the securities regulatory agency under the State Council” as stipulated in Article 186 of the Securities Law:

(1) Transfer of shares in excess of the specified amount, including:

1. Major shareholders or other shareholders holding shares issued before the initial public offering transferred shares in violation of the provisions of Articles 12 and 14 of the “Administrative Measures on Shareholder Reduction”;

2. Directors and senior managers violate the provisions of Article 160 (2) of the “Company Law” on limiting the transfer ratio, or transfer shares in violation of section 5 of the “Rules on Changes in Shareholding of Directors and Executives”;

3. Venture capital funds transfer shares in violation of section 2 of the “Special Provisions for Shareholders of Venture Capital Funds of Listed Companies to Reduce Their Shareholdings”.

(2) Transfer of shares in violation of information disclosure requirements, including:

1. The majority shareholder transferred shares in violation of the provisions of Article 9 of the “Administrative Measures on Shareholders' Shareholders' Shareholdings Reduction”;

2. Directors and senior management transferred shares in violation of section 9 of the “Rules on Changes in Shareholding of Directors and Executives”;

3. Major shareholders, directors, and senior management personnel transferred shares in violation of section 20 of the “Measures for Continued Supervision of Companies Listed on the Beijing Stock Exchange (Trial)”.

(3) Other situations where the transfer of shares does not comply with laws, administrative regulations, and the provisions of the China Securities Regulatory Commission.

Article 6. Where the perpetrator violates the provisions of Article 63 (1), (2), and 70 of the Securities Law, transfers shares of a listed company in serious circumstances and violates the provisions of Article 36 (1) of the Securities Law, the offender shall be punished in accordance with Section 186 of the Securities Law.

Article 7. Where all actors act together to transfer securities in violation of regulations, constituting a joint offense, they shall all be deemed to be violators of the law. If some of the actors involved in the act of transferring securities in violation of regulations, and there is no evidence that the concerted actors have committed a joint offense, the entity that transferred the securities and is at fault is recognized as the offending entity.

Article 8. If shares are transferred during the restricted transfer period for shares issued prior to the initial public offering, which falls under the circumstances stipulated in Article 3 (1) of these Rules, a correction shall be ordered, a warning shall be given, and the illegal proceeds shall be confiscated. Within the fine range stipulated in Section 186 of the Securities Law, the discretionary order shall be determined according to the following method:

(1) Where the illegal transfer ratio is less than 2% of the total share capital of the listed company, or the amount of the illegal transfer is less than 40 million yuan, it falls under the lesser penalty level, and a fine of not more than 30% of the illegal transfer amount is imposed;

(2) Where the proportion of illegal transfers is 5% or more of the total share capital of a listed company, and the amount of the illegal transfer amount is 500 million yuan or more, it falls under the heavier penalty level, and a fine of not less than 50% and not more than 1 times the amount of the illegal transfer amount is imposed;

(3) Situations other than those stipulated in the first two provisions fall under the general penalty level, and a fine of at least 30% and not more than 50% of the amount transferred in violation of regulations shall be imposed.

Article 9. A person who transfers securities within a limited transfer period in violation of the provisions of law and falls under the provisions of Article 3 (2) to (4) of these Rules, or does not comply with administrative regulations or the provisions of the China Securities Regulatory Commission in terms of holding period or time of sale, and falls within the circumstances stipulated in Article 4 of these Rules, order correction, give a warning, and confiscate the illegal proceeds. Within the fine range stipulated in Section 186 of the Securities Law, the order of discretion is determined according to the following methods:

(1) Where the illegal transfer ratio is less than 2% of the total share capital of the listed company, or the amount of the illegal transfer is less than 40 million yuan, it falls under the lesser penalty level, and a fine of not more than 20% of the illegal transfer amount shall be imposed;

(2) Where the proportion of illegal transfers is 5% or more of the total share capital of a listed company, and the amount of the illegal transfer amount is 500 million yuan or more, it falls under the heavier penalty level, and a fine of not less than 30% and not more than 1 times the amount of the illegal transfer amount is imposed;

(3) Situations other than those stipulated in the first two provisions fall under the general penalty level, and a fine of not less than 20% and not more than 30% of the amount transferred in violation of regulations shall be imposed.

Among them, anyone who transfers shares in violation of the provisions of Article 7 and Article 8 of the “Administrative Measures on Shareholders' Shareholders' Shareholdings Reduction” and Article 4 (3) to (7) of the “Rules for Changes in Shareholders' Shareholdings” shall be severely punished within the corresponding discretionary level.

Article 10. Where the quantity sold, information disclosure, etc. does not comply with the law, administrative regulations, and the provisions of the China Securities Regulatory Commission, and falls under the circumstances stipulated in Article 5 of these Rules, order the correction, give a warning, and confiscate the illegal proceeds. Within the fine range stipulated in Article 186 of the Securities Law, the discretionary order shall be determined according to the following method:

(1) Where the illegal transfer ratio is less than 2% of the total share capital of the listed company, or the amount of the illegal transfer is less than 40 million yuan, it falls under the lesser penalty level, and a fine of not more than 10% of the illegal transfer amount is imposed;

(2) Where the proportion of illegal transfers is 5% or more of the total share capital of a listed company, and the amount of the illegal transfer amount is 500 million yuan or more, it falls under the heavier penalty level, and a fine of not less than 20% and not more than 1 times the amount of the illegal transfer amount is imposed;

(3) Situations other than those stipulated in the first two provisions fall under the general penalty level, and a fine of not less than 10% and not more than 20% of the amount transferred in violation of regulations shall be imposed.

Article 11. Where securities are transferred in violation of regulations and fall under the circumstances stipulated in Article 6 of these Rules, correction is ordered, a warning is given, and illegal proceeds are confiscated. Within the fine range stipulated in section 186 of the Securities Law, the discretionary order is determined according to the following method:

(1) Where the proportion of illegal transfers is less than 2% of the total share capital of the listed company, or the amount of the illegal transfer is less than 40 million yuan, it falls under the lesser penalty level, and a fine of not more than 3 times the illegal proceeds; if there is no illegal proceeds or the illegal proceeds are less than 1 million yuan, a fine of not more than 3 million yuan shall be imposed;

(2) Where the illegal transfer ratio is 5% or more of the total share capital of the listed company, and the amount of the illegal transfer amount is 500 million yuan or more, it is a heavier penalty, with a fine of at least 5 times and 10 times less than the illegal proceeds; if there is no illegal gain or less than 1 million yuan, a fine of not less than 5 million yuan and not more than 10 million yuan; if the circumstances are particularly serious, a fine of not less than 10 million yuan and not more than 30 million yuan;

(3) In circumstances other than those stipulated in the first two provisions, it falls under the general level of punishment, and a fine of at least 3 times 5 times the illegal proceeds; if there is no illegal proceeds or the illegal proceeds are less than 1 million yuan, a fine of not less than 3 million yuan and not more than 5 million yuan shall be imposed. The amount of the fine determined in accordance with the preceding paragraph shall not exceed the maximum amount of the penalty determined in section 10 of these Rules at the discretion level determined under the same circumstances.

Article 12. Where securities are transferred in violation of regulations, as stipulated in Articles 7 and 8 of the Basic Rules of Discretion, there shall be no punishment or exemption from punishment according to law.

Article 13. Whoever transfers securities in violation of regulations and voluntarily buys back all securities in accordance with the law and pays the price difference to a listed company before an administrative penalty decision is made, the penalty may be reduced by one level of discretion within the statutory range. If the penalty is already light, a lower amount of fine may be imposed within that level. If it complies with the provisions of Article 9 of the Basic Rules of Discretion, the penalty shall be mitigated.

If securities are transferred in violation of regulations, a lower amount of fines may be imposed within the corresponding discretionary level based on the circumstances of the entire case; if the relevant circumstances have a significant impact, the discretionary level penalty can be reduced within the statutory range. For those that are already in the light penalty level, a lower amount of fine may be imposed within that level:

(1) The perpetrator is an investor other than a major shareholder, director, senior manager, or acquirer of a listed company;

(2) Take the initiative to buy back some securities in accordance with the law and pay the price difference to the listed company before the administrative penalty decision is made;

(3) The China Securities Regulatory Commission, its dispatched agencies, and stock exchanges voluntarily reported, announced, and stopped transfers before they were discovered, and the proportion and amount of illegal transfers was small;

(4) The act of transferring securities in violation of regulations is relatively close to the first trading day when the transfer is permitted;

(5) Other mitigating circumstances as stipulated in Article 10 of the Basic Rules of Discretion.

Article 14. Where securities are transferred in violation of regulations in any of the following circumstances, a higher amount of fines may be imposed within the corresponding discretionary level; if the relevant circumstances have a significant impact, the discretionary level of punishment may be increased within the legal range; for those that have already been severely punished, a higher amount of fines may be imposed within that level:

(1) Causing a change in the largest shareholder or actual controller of a listed company;

(2) Selling in large quantities in a short period of time. The amount sold accounts for a high proportion of the securities held by the perpetrator, and the corresponding securities prices fluctuated abnormally;

(3) Frequent trading by borrowing large amounts of other people's accounts;

(4) Use channels such as judicial enforcement, stock pledge liquidation, gifts, etc., to detour holdings and transfer securities in violation of regulations; or detour to reduce holdings and transfer securities in violation of regulations by participating in derivatives transactions, restricted stock transfers and loans, and restricted shareholder loan sales, etc.;

(5) Transferring securities in violation of regulations after organizing, participating in, or implementing financial fraud in a listed company, or a major shareholder, director, or senior management of a listed company is aware of the listed company's financial fraud and still transfers securities in violation of regulations;

(6) Other aggravating circumstances as stipulated in Article 11 of the Basic Rules of Discretion.

Article 15. Where the perpetrator carries out multiple independent acts of transferring securities in violation of regulations, the penalty shall be imposed separately, and the amount of the fine shall be calculated cumulatively.

Where the same act of transfer simultaneously violates multiple restrictive provisions on the transfer of securities mentioned in Articles 3 to 6 of these Rules, the penalty shall be imposed in accordance with the heavier penalties thereof.

Article 16 In individual cases, where there are special circumstances such as the amount of illegal transfers of securities, illegal proceeds, etc., which are abnormally high but other circumstances are minor, or where the relevant indicators are low but the social impact may be clearly inappropriate or unfair, in accordance with the provisions of Article 20 (2) of the “Basic Rules of Discretion”, it may be adjusted and applied after approval by the main person in charge of the China Securities Regulatory Commission or a collective discussion decision.

Article 17 Where the circumstances of illegal transfer of securities are serious, measures may be taken to ban those responsible from entering the securities market.

The period of the market ban is determined in accordance with the provisions of Article 7 of the “Securities Market Prohibition Regulations”, taking into account the facts, nature, circumstances, degree of social harm, etc. of the illegal act.

Article 18: These rules will take effect on December 1, 2026.

Drafting instructions for the “Implementation Rules for Administrative Penalties in Cases of Illegal Transfer of Securities”

In order to regulate the determination and discretion of administrative penalties in cases of illegal transfer of securities, strictly crack down on illegal holdings reduction, and effectively protect the legitimate rights and interests of investors, the China Securities Regulatory Commission has drafted the “Implementation Rules for Administrative Penalties in Cases of Illegal Transfer of Securities” (hereinafter referred to as the “Rules”). The instructions are as follows:

I. Drafting background

The 2019 Securities Law made major changes to the identification and punishment of illegal transfer of securities. In particular, it expanded the scope of regulation from “violation of laws and regulations” to “violation of laws, administrative regulations and regulations of the securities regulatory agency under the State Council”, and expanded the type of regulation from “violation of restricted transfer period” to “violation of restricted transfer period, holding period, sale time, quantity sold, method of information disclosure, etc.”, providing sufficient legal basis for combating such illegal acts. Because of the variety of specific types of securities transferred in violation of regulations, the circumstances are complicated, and some legal application issues need to be clarified in the form of documents; after the “China Securities Regulatory Commission's Basic Rules on Discretionary Administrative Penalties” come into effect on March 1, 2025, it is also necessary to refine issues such as discretionary ranking criteria and punishment circumstances for specific cases in accordance with this rule. Based on the above considerations, the China Securities Regulatory Commission summed up the enforcement experience and formed these “Rules”.

II. Drafting principles

The Rules were drafted in accordance with the following principles:

The first is based on the law. The “Rules” are drafted in strict accordance with the provisions of superior laws such as the “Administrative Penalty Law” and “Securities Law”. They neither increase the types of offenses nor change the scope for punishment; they only make detailed arrangements for specific types of securities transferred in violation of regulations within the scope stipulated by law.

The second is to seek truth from facts. There are various types of securities transferred in violation of regulations, but according to section 186 of the Securities Law, they are all subject to fines “trading securities equal to or less than the equivalent value”. In order to achieve “comparable penalties”, it is necessary to break down the different types of offenses, set differential punishment margins, and accurately enforce the law.

The third is problem orientation. The “Rules” focus on solving common and frequent difficult issues in administrative punishment practice, and confirm common practices that have already been agreed upon in the form of provisions.

III. Main contents

The Rules consist of 18 articles. Article 1 is the basis for enactment. Sections 2 to 7 are the “Determination” section, which successively clarifies the meaning and specific circumstances of “transferring securities”, “transferring securities within the restricted transfer period” and “transferring shares does not comply with the law, administrative regulations, and the regulations of the securities regulatory agency under the State Council” as stipulated in Article 186 of the Securities Law, as well as the determination of offenders who acted in concert. Articles 8 to 17 are the “discretionary” section, which distinguishes the four types, sets different levels of discretion, and makes enumerative provisions on the circumstances of punishment adjustment, and makes indicative provisions on the circumstances of combined punishment and priority punishment, situations where adjustments are applied, and market prohibitions. The key issues are described as follows:

(i) The meaning of “transfer of securities” and “illegal transfer of securities” in these rules (art. 2)

Article 2 of the Rules lists common specific situations of “transfer of securities”, and clearly includes both transactional and non-transactional transfers.

“Illegal transfer of securities” is divided into broad and narrow terms. Broadly speaking, Chapter 3, “Securities Transactions” of the Securities Law stipulates a variety of prohibited transactions. Transferring securities in violation of the provisions of this chapter is an illegal transfer of securities; in a narrow sense (that is, a concept used in the Rules), it only refers to illegal acts subject to administrative punishment in accordance with section 186 of the Securities Law. The illegal transfer of securities for which “legal liability” in Chapter 13 of the Securities Law has been categorized and separate penalties have been set is not within the scope of these Rules.

(2) Classification of illegal transfer of securities (Articles 3 to 6)

According to the provisions of Article 36 and Section 186 of the Securities Law, illegal transfers of securities are classified as “transferring securities within the restricted transfer period” and “transferring shares does not comply with the law, administrative regulations and the regulations of the securities regulatory agency under the State Council”. Specific mandatory provisions are stipulated in the “Company Law”, “Securities Law”, “Interim Measures for the Management of Shareholder Reduction of Shareholdings of Listed Companies” (hereinafter referred to as “Administrative Measures on Shareholder Reduction”), “Rules for Managing Changes in Shareholder Holdings of Listed Companies”, “Rules for Managing Changes in Shareholder Holdings of Listed Companies”, etc. Regulations , regulations, and regulatory documents of the China Securities Regulatory Commission. In order to facilitate enforcement operations, the “Rules” are subdivided into four categories according to the nature of the securities, the subject of the act, the nature of the act, and the extent of harm, into four categories: “transferring securities within the restricted transfer period” (Section 3), not complying with administrative regulations, China Securities Regulatory Commission regulations (Section 4) in terms of holding period and time of sale (Section 4), and illegal transfer of shares during acquisitions (Section 6) in terms of quantity sold, disclosure of information, etc. (Section 5).

What needs to be clarified is that with regard to section 6, the perpetrator violates the provisions of section 63 (1), (2), and 70 of the Securities Law and fails to transfer shares in violation of regulations during an acquisition, such as suspending trading, etc., as stipulated in section 36 (1) of the “Securities Law”, and is punishable by section 186 of the Securities Law, but this kind of act is different from what is commonly referred to as “illegal reduction of holdings.” The act of “illegal holdings reduction” is when specific personnel (mainly major shareholders, directors, senior managers, and specific targets) use their advantages to “dump” the secondary market, overdraft future profits in advance, and alienate the capital market into a “money ring” tool, seriously undermining the fairness of the capital market and harming the legitimate rights and interests of small and medium-sized investors. However, “illegal transfer of shares during acquisitions, such as not suspending transactions in accordance with regulations,” violates the “slow movement rules” of the secondary market, etc., and regulatory documents such as the “Administrative Measures on Shareholder Reduction” and “Rules on Changes in Shareholders' Shareholdings of Directors and Executives” do not include such situations. Based on the above considerations, Article 6 of the Rules stipulates it separately, and each subsequent step corresponds to a separate level of discretion.

(3) Determination of offenders acting in concert (Article 7)

In cases involving the illegal transfer of securities by acting in concert, whether the perpetrator can be administratively punished mainly depends on whether the perpetrator is subjective at fault and whether the actors acting in concert constitute a joint violation of the law. Where all actors act together to transfer securities in violation of regulations, constituting a joint offense, they shall all be deemed to be violators of the law. If some of the actors involved in the act of transferring securities in violation of regulations, and there is no evidence that the concerted actors have committed a joint offense, the entity that transferred the securities and is at fault is recognized as the offending entity.

(4) Differentiated establishment of discretionary levels (Articles 8 to 17)

Sections 3 to 6 of the Rules distinguish between categories of securities transferred in violation of regulations. The main purpose of the distinction is to differentiate between discretionary levels and achieve “comparable penalties.” More specifically:

First, the most harmful illegal transfer of original shares is divided into three levels of discretion according to “0-30% -50% to 100%” of the transfer amount. Second, other acts of transferring securities that violate restrictive regulations in terms of holding period and time of sale are divided into three levels of discretion according to “0-20% -30% to 100%” of the transfer amount. The third is the transfer of securities in violation of restrictive regulations in terms of quantity sold, disclosure of information, etc., and is divided into three levels of discretion according to “0-10% - 20% - 100%” of the transfer amount. Fourth, illegal stock transfers during acquisitions, such as failure to suspend trading in accordance with regulations, are divided into three discretionary levels according to the nature of the act and the degree of social harm, where a “multiple penalty” is applied within the equivalent value of trading securities, according to “0-3 times -5 times to 10 times” of the illegal proceeds; if the illegal proceeds are less than 1 million yuan, a “fixed penalty” is applied according to “0-3 million yuan - 5 million yuan - 10 million yuan”. At the same time, considering that in some cases there were special bad situations such as one-way sales in a short period of time, leading to a change in control of the listed company, the provision “If the circumstances are particularly serious, a fine of not less than 10 million yuan and not more than 30 million yuan” was added to the heavier punishment hierarchy. Furthermore, considering that illegal stock transfers during acquisitions, such as failure to suspend transactions in accordance with regulations, are generally less harmful than typical illegal holdings reduction under the same circumstances, Article 11 (2) stipulates: “The amount of the fine determined in accordance with the preceding paragraph shall not exceed the maximum amount of the discretionary fine determined in section 10 of these Rules under the same circumstances.”

After determining the order of discretion, Articles 12 to 14 of the Rules clarify the circumstances of no punishment, exemption from punishment, mitigation of punishment, lighter punishment, and heavier punishment.

Finally, Articles 15 to 17 of the Rules provide indicative provisions on cases of combined penalties and double punishment, circumstances of adjustment and application, and market prohibitions.

What needs to be clarified is that our “Transition Arrangements Relating to the Implementation of the Supporting System Rules of the New 'Company Law'” clearly requires: (1) Listed companies should establish an audit committee within the board of directors before January 1, 2026, to exercise the powers of the board of supervisors as stipulated in the Company Law, without a board of supervisors or supervisors; (2) before a listed company adjusts the establishment of the company's internal supervisory body, the board of supervisors or supervisors shall continue to abide by the provisions of the original system rules of the Securities Regulatory Commission. Therefore, before a listed company adjusts the establishment of the company's internal supervisory authority, the supervisor violates the restrictive provisions of the Securities Regulatory Commission's original system rules regarding the reduction of shareholding by supervisors, penalties will be imposed in accordance with the requirements of the above documents.

This article was selected from the official website of the “Securities Regulatory Commission”. Zhitong Finance Editor: Feng Qiuyi.