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Table of Contents

China Securities Regulatory Commission (CSRC): Overview

By
James Chen
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James Chen, CMT is an expert trader, investment adviser, and global market strategist.

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Updated May 31, 2022
Reviewed by Caitlin Clarke

What Is the China Securities Regulatory Commission (CSRC)?

The China Securities Regulatory Commission (CSRC) is the national regulatory body that oversees the securities and futures industry of the country. The CSRC is the functional equivalent of the Securities and Exchange Commission (SEC) of the U.S., charged with maintaining orderly and fair markets. The CSRC includes 36 regulatory bureaus that cover different geographic regions of the country, and two supervisory bureaus at the nation's two largest stock exchanges in Shanghai and Shenzhen.

Key Takeaways

  • The China Securities Regulatory Commission (CSRC) is China's regulatory body that oversees the securities industry in the country.
  • The U.S. Securities and Exchange Commission (SEC) is the equivalent of the CSRC.
  • The CSRC reports directly to China's State Council, the main administrative body of China.
  • The roles of the CSRC are varied, but consist of creating and implementing securities law, approval and regulation of fund management companies, gathering and publishing market statistics, and investigating and penalizing violations of the law.
  • The CSRC operates with a heavy hand, doling out severe fines, penalties, bans, and other punishments for violating the law.

Understanding the China Securities Regulatory Commission (CSRC)

The CSRC performs many of the regulatory functions that such an agency overseeing financial aspects of a country would. It came into being when China passed its securities law in 1998, making the agency a fairly new regulator. Like most organizations in China, the CSRC reports directly to China's State Council, which is the main administrative authority in China.

Since January 2019, the Chairman of the CSRC is Yi Huiman.

The CSRC is located in Beijing and is headed by one chair, followed by four vice-chairs. The board also contains one secretary of the Discipline Commission and three assistants to the chair. There are 18 functional departments that make up the CSRC, with one inspection division and three centers, in addition.

According to the China Securities Regulatory Commission (CSRC), the regulatory agency performs the following roles:

  • Formulation and implementation of laws and regulations for the securities and futures markets
  • Supervision and compliance maintenance of securities companies
  • Oversight of the issuance, trading, custody, and settlement of stocks, bonds, and other listed securities
  • Supervision of the listing, trading, and settlement of domestic futures and the monitoring of overseas futures activity of domestic institutions
  • Control of the 36 affiliated bureaus and their managers
  • Approval and regulation of fund management companies, the securities depository, clearing corporations, credit rating agencies, and fund custodians
  • Approval and supervision of direct or indirect issuance and listing of shares overseas by domestic entities
  • Supervision of foreign securities and futures trading firms in China
  • Gathering and publication of market statistics
  • Oversight of accounting firms and law firms that conduct work for the securities and futures industry
  • Investigation and enforcement of CSRC laws and regulations and penalization of any violations

The Heavy Hand of the CSRC

Capital markets in China are still in development, and there are those who dare flaunt the laws. Just like in the U.S. with the SEC, the CSRC will stamp out illegal practices whenever it finds them. In March 2018, the CSRC levied a record 5.67 billion yuan (approximately $900 million) fine on a domestic company for manipulating the share prices of newly-listed banks.

Numerous other cases have also led to disgorgement, penalties, bans from trading, and jail time. Even the CSRC had to police its own. In 2017, the head of the initial public offering (IPO) division of the Shenzhen and Shanghai exchanges was found guilty of corruption in her dealings with the market that she was entrusted to regulate. The penalty: life in prison.

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  1. Thomas Reuters Practical Law. "China Securities Regulatory Commission."