SHANGHAI (Reuters) – China’s Supreme People’s Court published rules on Friday that will make it easier for victims of securities fraud to claim compensation in Beijing’s latest step to stamp out corporate cheating and protect investors interests.
The new rules will take effect on Jan. 22 and allow investors to bring cases independently of any action by the securities regulator, representing “a major step” that will help deepen capital market reforms, the China Securities Regulatory Commission (CSRC) said in a statement on its website.
The rules come as China plans to expand a reform of initial public offerings (IPOs) this year. Under the reform, China is moving from a regulatory approval IPO system to a U.S.-style registration-based system, making investors more responsible for their own investments.
CSRC has repeatedly vowed “zero tolerance” against securities fraud in capital markets, which Beijing hopes can attract more private money to fund innovation and economic growth.
It said the new rules will target controlling shareholders as “chief evils” in fraud cases, curb “deceptive” restructurings and hold accomplices responsible.
In November, a Chinese court ruled against Kangmei Pharmaceutical Co and some of its former executives, handing victory to investors in China’s first class-action lawsuit against corporate securities fraud.
(Reporting by Shanghai Newsroom;Editing by Elaine Hardcastle)
