China Securities Regulatory Commission (CSRC): A Comprehensive Guide

What Is the China Securities Regulatory Commission (CSRC)?

The China Securities Regulatory Commission (CSRC) serves as the primary national authority overseeing the securities and futures markets in China. Comparable to the U.S. Securities and Exchange Commission (SEC), the CSRC is responsible for maintaining market integrity and fairness. It operates through 36 regional regulatory offices and two supervisory bureaus located at China’s largest stock exchanges in Shanghai and Shenzhen.

Key Insights

• The CSRC is China’s main regulator for the securities sector.
• It operates similarly to the U.S. SEC in function and scope.
• Directly accountable to China’s State Council, the nation's top administrative body.
• Its duties include drafting and enforcing securities laws, regulating fund management firms, compiling market data, and investigating legal violations.
• The CSRC enforces regulations strictly, imposing hefty fines, bans, and other sanctions on offenders.

Understanding the Role of the China Securities Regulatory Commission (CSRC)

Established following the enactment of China’s securities law in 1998, the CSRC is a relatively modern regulatory institution. Reporting directly to the State Council, it is headquartered in Beijing and led by a chairman, supported by four vice-chairpersons, a Discipline Commission secretary, and three aides. The organization comprises 18 functional departments, an inspection unit, and three specialized centers.

Since January 2019, Yi Huiman has served as the Chairman of the CSRC.

The CSRC’s responsibilities include:

• Developing and enforcing regulations governing securities and futures markets
• Monitoring compliance of securities firms
• Overseeing issuance, trading, custody, and settlement of stocks, bonds, and other securities
• Supervising domestic futures markets and overseeing overseas futures activities by Chinese institutions
• Managing its 36 regional bureaus and their leadership
• Approving and regulating fund managers, securities depositories, clearinghouses, credit rating agencies, and custodians
• Authorizing and supervising domestic entities’ overseas share issuances and listings
• Regulating foreign securities and futures firms operating in China
• Collecting and publishing market statistics
• Supervising accounting and legal firms servicing the securities and futures industries
• Investigating violations of securities laws and enforcing penalties

The CSRC’s Firm Regulatory Approach

China’s capital markets are still evolving, and the CSRC plays a critical role in curbing illegal activities. Mirroring the SEC’s vigilance in the U.S., the CSRC aggressively targets market misconduct. For example, in March 2018, it imposed a record 5.67 billion yuan (around $900 million) penalty on a domestic firm for manipulating stock prices of newly listed banks.

Other enforcement actions have included disgorgements, fines, trading bans, and imprisonment. The CSRC also holds its own accountable; in 2017, the head of the IPO division at the Shenzhen and Shanghai exchanges was sentenced to life imprisonment for corruption related to market regulation duties.

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