To crack down on securities and futures violations, the China Securities Regulatory Commission (CSRC) and the Ministry of Finance plans to increase the maximum reward for whistleblowers to RMB1 million (USD140,458) with draft rules open for public consultation until 30 October this year.
The country’s top securities regulator is considering increasing whistleblowers’ reward to 3% of the total fines and confiscations in each case, up from 1%, the consultation paper states.
Whistleblowers who report on major cases will receive higher rewards. The maximum reward for tips linked to major violations will be raised from RMB100,000 to RMB500,000. For cases that might have a nationwide impact, involving exceptionally large sums, or shared by insiders, the reward might be lifted from a maximum of RMB300,000 or RMB600,000, respectively, to RMB1 million.
The authorities are also proposing an increase to the eligibility threshold for rewardable cases. These cases must involve fines and confiscations of at least RMB1 million, a tenfold increase from RMB100,000. The reported misconduct must also constitute a serious violation that disrupts market order, endangers financial stability, or infringes investors’ lawful rights.
Whistleblowers who voluntarily disclose their own misconduct may receive leniency: the CSRC might reduce, mitigate or waive administrative penalties, or recommend lighter sentences to the judicial authorities.
The CSRC has been stepping up its efforts to crack down on violations in the securities and futures markets. Last year, it handled 739 cases, issued 592 administrative penalties, and collected RMB15.3 billion in fines and confiscations – a 2.4 times increase from 2023.
