CSRC: Further Strengthen the Legal Framework of the Capital Market and Deepen Work Related to Rational Investing, Value Investing, and Long-term Investing

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CSRC: Further Strengthen the Rule of Law in Capital Markets

Deepen the promotion of rational investment, value investment, and long-term investment related work

◎Reporter Zhou Liang

On March 27, Cheng Hehong, Chief Lawyer of the China Securities Regulatory Commission (CSRC), stated at the Boao Forum for Asia Annual Conference 2026 that in 2025, various types of medium and long-term funds will significantly increase their market entry efforts, with social security funds, insurance funds, pension funds, public funds, and proprietary trading by securities firms collectively net buying A-shares exceeding 800 billion yuan. Additionally, relevant funds purchasing equity funds, state-owned enterprises repurchasing and increasing shareholdings, and other funds will result in the actual new market entry scale exceeding 1 trillion yuan.

Next, the CSRC will strengthen the rule of law in capital markets, improve systems, and enhance mechanisms to deepen the promotion of rational investment, value investment, and long-term investment related work.

**　The legal foundation for long-term investment is further consolidated**

“In a market structure like China, where the number of individual investors accounts for a high proportion, promoting rational investment, value investment, and long-term investment is particularly significant,” Cheng Hehong stated.

Since the introduction of the new “National Nine Measures” more than two years ago, the CSRC has successively formulated and modified more than 50 regulations and normative documents, including the “Measures for the Administration of Information Disclosure by Listed Companies,” “Interim Measures for the Administration of Share Reduction by Shareholders of Listed Companies,” and “Several Opinions on Strengthening the Protection of Small and Medium Investors in Capital Markets.” It has worked with relevant parties to issue “Guiding Opinions on Promoting Medium and Long-term Funds to Enter the Market” and implementation plans; published a series of policy documents, including “Improving the Quality of Listed Companies from the Source,” “Strictly Implementing the Delisting System,” and “Accelerating the Construction of First-Class Investment Banks and Investment Institutions”; promoted the improvement of long-cycle assessment mechanisms for insurance, pension, and social security funds; pushed for public fund reform; further streamlined and optimized the interests binding between fund companies, fund managers, and investors; and improved relevant tax systems as measures gradually take effect.

While improving institutional rules, the CSRC, in collaboration with public security and judicial authorities, has strengthened regulatory enforcement, severely cracking down on a large number of securities violations and crimes that harm the legitimate rights and interests of investors, such as fraudulent issuance, financial fraud, market manipulation, and insider trading.

In 2025, the CSRC will support and cooperate with judicial authorities to increase the adjudication of representative litigation cases in securities, with the Jin Tong Ling false statement civil compensation case leading to a judgment requiring the company to compensate over 40000 investors for investment losses exceeding 770 million yuan, effectively protecting the legitimate rights and interests of investors.

Cheng Hehong stated that the financial law draft is currently open for public comments, which clearly stipulates “supporting medium and long-term funds to enter the market, enhancing the inherent stability of the capital market.” The legal foundation for rational investment, value investment, and long-term investment is further consolidated.

**　Further strengthen the rule of law in capital markets**

Cheng Hehong stated that the CSRC will further strengthen the rule of law in capital markets, improve systems, and enhance mechanisms to deepen the promotion of rational investment, value investment, and long-term investment related work.

First, organize and carry out assessments of the implementation effects of the Securities Law, study and summarize policies and rules conducive to promoting rational investment, value investment, and long-term investment, and refine them into national legal provisions for the securities market, further consolidating the legal foundation for rational investment, value investment, and long-term investment.

Second, continue to advance the revision of the Securities Investment Fund Law, transforming the relevant practices and results of public fund reform into law, to promote investment-side reform, build first-class investment institutions, enhance the professional capabilities and investment levels of institutional investors, and play a leading role in fulfilling the responsibilities and missions of rational investment, value investment, and long-term investment, providing more robust legal protection.

Third, promote the formulation of regulations for the supervision and management of listed companies, and revise and improve the regulations on the supervision and management of securities companies, further improving the quality of listed companies, regulating and optimizing the service activities of securities and futures operating institutions to investors, and creating a more favorable market ecology for rational investment, value investment, and long-term investment.

Fourth, collaborate with relevant parties to deeply implement policies and measures related to promoting rational investment, value investment, and long-term investment in performance, assessment, compensation, tax, etc., further exerting the positive role of relevant policies in attracting long-term funds and enhancing the inherent stability of the market.

Fifth, organize the CSRC system to systematically sort and evaluate existing securities and futures regulatory normative documents, as well as relevant business rules regarding issuance, listing, the supervision of securities and futures fund operating institutions, and market trading, and dynamically modify and improve them.

Sixth, strengthen daily regulatory guidance. Ensure rigorous registration and review of enterprise issuance and listing, providing investors with more high-quality securities financial products with investment value; carry out a new round of special actions for corporate governance, offering better guarantees for investors’ participation in corporate governance; improve the quality of information disclosure to better serve investors’ scientific and rational investment decisions; guide listed companies to implement cash dividends as required, solidifying the market foundation for value investment and long-term investment; enhance supervision and management of market trading activities such as share reduction and systematic trading, creating a fair trading environment for various investors; and strengthen the supervision and management of securities and futures operating institutions’ internal control, compliance, and business activities such as investment banking, brokerage, asset management, margin financing, and investment consulting, better serving the rational investment, value investment, and long-term investment missions of these institutions.

Seventh, enforce the law strictly and strengthen investor protection. Focus on punishing securities and futures illegal activities that infringe upon investors’ rights and disrupt market order, such as fraudulent issuance, financial fraud, market manipulation, insider trading, and defrauding clients. If a crime is constituted, the case will be transferred to public security judicial authorities according to law. Collaborate with judicial authorities to research and formulate or revise criminal judicial interpretations regarding breach of trust harming listed companies’ interests, insider trading, and civil damage compensation for market manipulation and insider trading, deeply advancing the work of securities representative litigation, increasing the application of the advance compensation system, improving the effectiveness of investor education and publicity, and better embedding investor education into the business processes of securities and futures operating institutions when developing clients and providing services.

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Editor: Wei Zirong