๐ The CSRC Investigation Process and How to Respond
The China Securities Regulatory Commission (CSRC) is the statutory securities regulator. It investigates and sanctions misconduct in China's securities markets. With tightening enforcement, an administrative inquiry can escalate into criminal prosecution. Companies and individuals under CSRC investigation should engage counsel at the investigation stage to build a comprehensive response strategy.
1. The Investigation Timeline
2. Common Investigation Types and Responses
Information Disclosure Violations
Failure to disclose, false records, misleading statements. Response strategy: proactive correction, explain the causes, show absence of intent.
Insider Trading Investigations
Focus on sensitive-period trading and unusual account links. Response strategy: prove the trade was legitimate and exclude access to inside information.
Market Manipulation Investigations
Monitoring of abnormal trading and affiliated account groups. Response strategy: prove trading-strategy independence and absence of manipulative intent.
3. Why Early Counsel Changes Outcomes
Counsel engaged early can: understand the direction and scope of the inquiry, help prepare evidence, assess legal exposure, design a response strategy, and narrow the investigation. Firms that intervene at this stage see materially lower penalty rates.
After the Notice of Proposed Administrative Penalty, there is a 10-15 day period for statements and defenses, and you may request a hearing. Counsel can challenge the legality and reasonableness of the proposed basis, present favorable evidence, and seek reduction or no penalty.
4. Administrative Penalty vs. Criminal Prosecution
5. Why Choose Guangdong Faniu?
- Early intervention: We engage from the CSRC inquiry stage, resolving criminal risk at its source.
- Dual expertise: Securities law + criminal defense, precisely navigating the boundary between administrative violation and crime.
- Full-process coverage: Inquiry response โ administrative hearing โ administrative review/litigation โ criminal defense โ trial.
- Cross-border capability: For China-concept or cross-border matters, we coordinate U.S.-China defense teams.
The investigation stage is the critical window. Contact Director Attorney Li Maoshu: +86 186 6492 1865 / WhatsApp / WeChat. Guangdong Faniu Law Firm ยท 17F, Shangbu Building, Futian, Shenzhen.