China Securities Regulatory Commission, Rules for Determining the Administrative Liability for Acts of Violation of Information Disclosure Laws

Promulgated: April 29 2011
Effective: as of date of promulgation

Main contents: According to the Rules, the failure of parties with an obligation to disclose information in information disclosure documents according to the disclosure requirements on major events or matters stipulated in laws, administrative regulations, rules, normative documents and the business rules of stock exchanges, and the omission of major events shall constitute an act of violation of laws on information disclosure concerning major omission (Article 10).

When determining whether an act constitutes a violation of disclosure laws, objective criteria such as whether the act results in a change in profitability or loss and whether it leads to the satisfaction of the conditions for resumption of stock trading shall generally be considered (Article 12). Subjective criteria such as the attitude of the directors, supervisors and senior management personnel of the company after the disclosure violation act takes place shall also be considered, including whether they continue to cover up the matter and whether they have taken any appropriate remedial measures (Article 13). The personnel responsible for the disclosure violation may submit the company's articles of association, materials that state the division of labour and the performance of duties, the relevant meeting minutes or records as well as other evidence to prove that they are not at fault (Article 16).