China: An Investment Funds (PRC Firms) Overview

Overview and Practical Guide to Compliance and Litigation in China’s Securities Market (2025)

In 2025, China’s securities regulation continued to adhere to the policies of “stringent supervision with severe penalties” and “zero tolerance”. The multi-dimensional accountability regime integrating administrative enforcement, civil compensation and criminal liability has been progressively improved, resulting in a marked increase in compliance pressure and liability risks faced by participants in the securities market. This article aims to review the key developments in securities regulatory enforcement and judicial practice over the past year, and provide practical guidance on risk identification and response for relevant market participants.

Overview of securities compliance regulation

Overall, Chinese securities regulatory authorities continued to maintain a high-pressure enforcement posture characterised as “sharp and thorny”. In 2025, a total of 701 securities and futures violation cases were investigated and handled, with fines and confiscations totalling CNY15.47 billion, reaching a record high.

In terms of the types of violations, information disclosure violations – typically involving financial fraud or misappropriation of funds – together with insider trading and market manipulation, remained the primary targets of regulatory enforcement. More than 80 listed companies were placed under investigation for suspected information disclosure violations. Over 150 parties involved in insider trading were penalised, with total fines and confiscations amounting to approximately CNY900 million. Although the number of penalties for market manipulation declined, emerging forms of market manipulation through programmatic trading have already been brought within the enforcement focus of securities regulatory authorities.

Regarding liable parties, while persisting in “pursuing principal offenders”, securities regulators adhered to the principle of “dual investigation in a single case”, simultaneously investigating securities intermediaries such as sponsors/underwriters, auditing firms, and credit rating agencies to enforce their “gatekeeper” duties. Furthermore, based on the policy of “punishing accomplices”, multiple penalties were also imposed on parties that assisted or co-operated in fraudulent conduct.

With respect to the implementation of the delisting system, the principle of “delisting all entities that should be delisted” was rigidly enforced, resulting in the delisting of 31 listed companies over the course of the year. The notion that “delisting does not equate to exemption from liability” has become an ironclad rule, with numerous delisted companies and their responsible personnel facing administrative and even criminal liability.

In terms of enforcement mechanisms, first, the issuance of the “Basic Rules of the China Securities Regulatory Commission on Discretion in Administrative Sanctioning” clarified the specific standards governing whether to impose administrative penalties, as well as the types and scope of such penalties. Second, publicly disclosed administrative penalty decisions no longer set out the parties’ defence submissions or the regulatory authorities’ review opinions, but merely state conclusions such as “partially adopted” or “not adopted”, making it difficult for external observers to discern the regulatory authorities’ reasoning in individual cases. Third, although the “Administrative Commitment System in Securities Enforcement” has been successfully applied in two cases in practice, regulatory authorities remain cautious in its application, and no successful precedents have yet emerged for cases involving suspected securities trading violations or for issuers and their responsible personnel.

As to the co-ordination between administrative enforcement and criminal justice, the “Guiding Opinions on Strict and Impartial Law Enforcement and Administration of Justice to Serve and Guarantee the High-Quality Development of the Capital Market” were promulgated, reinforcing the practice of “transferring all cases that should be transferred” where securities violations are suspected of constituting criminal offences. Over the course of the year, public security authorities handled more than 200 major securities crime cases, including over 130 cases involving securities trading offences such as insider trading and market manipulation. The era of “harsh penalties and severe sanctions” in the field of securities crimes in China has well and truly arrived.

Overview of securities litigation

Overall, in 2025, both the number of civil compensation lawsuits arising from information disclosure violations and the aggregate amounts claimed remained at an exceptionally high level. China continues to be one of the most dynamic and risk-laden jurisdictions globally for securities litigation. From the perspective of judicial adjudication, however, there has been a clear trend toward greater professionalisation, rationality, and precision.

Stock misrepresentation litigation: professional and refined review has become the mainstream approach

In practice, broad consensus has formed regarding the principal issues in dispute, with defences relating to the materiality of misrepresentation, transaction causation, and loss causation receiving full attention and recognition from adjudicators. Where evidence is sufficient and defences are appropriately presented, defendants may significantly mitigate their compensation liability or even obtain exemption from liability.

Bond misrepresentation litigation: controversies continue to evolve alongside judicial exploration

Key questions include whether investors’ losses should be calculated as actual investment differential losses or as the principal and interest stated on the bond, how “materiality” should be assessed in the context of bond misrepresentation, and whether the determination of loss causation can be standardised and rendered more scientific. Notably, in a bond misrepresentation case, the Shanghai Financial Court commissioned a third-party professional institution to conduct a specialised assessment of loss causation, potentially signalling a new pathway for resolving loss determination issues.

Innovations in securities dispute resolution: co-ordinated development of multi-track mechanisms

In 2025, the representative litigation mechanism – including both special representative actions and ordinary representative actions – was further tested and applied in practice. However, due to its ability to strike a balance between procedural efficiency and overall market impact, the “model judgment + parallel case” approach continues to represent the mainstream model for handling securities misrepresentation disputes. Meanwhile, arbitration, leveraging its advantages of professionalism and confidentiality, is playing an increasingly important role in the resolution of complex commercial disputes, particularly bond misrepresentation cases.

Practical guide to compliance and litigation risk management

In response to an increasingly stringent and comprehensive liability regime for securities violations, securities market participants should systematically upgrade their response strategies, shifting from reactive “firefighting after the fact” to proactive “fire prevention in advance”.

Strengthen the core of securities compliance and risk awareness: preventive governance is paramount

It is essential to fully appreciate the severity of the “multi-dimensional accountability” regime governing securities liability and to embed compliance considerations deeply into corporate governance structures and decision-making processes. Market participants should enhance their ability to identify and assess compliance risks associated with business partners, counterparties, and transaction arrangements, while placing greater emphasis on cultivating compliance awareness and strengthening compliance systems.

Attaching high importance to risk signals and responding proactively at an early stage

Market participants should attach great importance to regulatory actions undertaken by stock exchanges and securities regulatory authorities, including on-site inspections, inquiries, and preliminary investigations. Intermediaries, in particular, should closely monitor investigations involving issuers they serve. Any speculative or complacent mindset must be firmly avoided; responses should be prompt, preparations thorough, and engagement proactive. Once a formal investigation is initiated or even an advance notice of administrative penalty is issued, heightened vigilance is required regarding the potential civil and criminal liabilities embedded in the administrative enforcement process. A forward-looking approach should be adopted to anticipate and proactively address derivative legal risks, so as to prevent further expansion of risk exposure.

Leveraging specialised legal expertise to identify root causes and respond in a targeted and effective manner

Although securities regulation and judicial practice in China have become highly specialised, the number of lawyers with extensive experience specifically in securities compliance, litigation, and securities-related criminal matters remains limited. Market participants should therefore exercise prudence in selecting professional legal teams and leverage their expertise and experience to promptly identify risk points. Through meticulous analysis, in-depth research, and well-founded legal reasoning, securities compliance and litigation risks can be properly addressed and effectively mitigated.

中国证券市场合规与诉讼概览与指南（2025）

2025年，中国证券监管继续秉持“严管重罚”“零容忍”政策，行政查处、民事赔偿与刑事追责“立体化”追责体系逐渐完善，证券市场主体面临的证券合规压力与责任风险显著攀升。本文旨在梳理过去一年的证券监管执法与司法实践核心动态，并为相关主体提供风险识别与应对实务指南。

证券合规监管概览

总体而言，中国证券监管机构继续保持“长牙带刺”的高压态势，2025年查办证券期货违法案件总计701件，罚没款金额达到154.7亿元，创历史新高。

在违法类型方面，信息披露违法（以财务造假、资金占用为典型）、内幕交易、操纵市场仍然是查处的最主要的违法行为。80多家上市公司因涉嫌信息披露违法被立案调查。超过150名内幕交易当事人被处罚，合计罚没金额约9亿元。操纵市场处罚数量虽有所回落，但新型的利用程序化交易操纵市场行为，已经纳入证监机关打击视野。

在责任主体方面，证券监管机构在坚持“追首恶”的同时，基于“一案双查”原则，同步查处保荐/承销机构、审计机构、资信评级机构等中介机构，落实“看门人”职责，而且基于“惩帮凶”政策要求，对配合造假方开出多张罚单。

在退市制度实践方面，“应退尽退”原则得到刚性执行––全年有31家上市公司退市。“退市不免责”亦成为铁律，多家退市公司及其责任人被同步追究行政乃至刑事责任。

在监管执法机制方面，其一，《中国证监会行政处罚裁量基本规则》出台，明确了证监机关决定是否给予处罚、给予处罚的种类和幅度时的具体裁量标准。其二，公开的行政处罚决定书不再列示当事人的申辩意见或监管部门的复核意见，仅载明“部分采纳”或“不予采纳”的结论，外界难以从处罚决定书本身清晰了解证监机关在个案中的执法认定思路。其三，尽管证券行政执法当事人承诺制度在实践中已有两单顺利落地，但监管者对该制度的适用仍持较审慎的态度，尚无证券交易类涉嫌违法案件主体或发行人及其责任人得以适用的成功案例。

在行刑衔接方面，《关于严格公正执法司法 服务保障资本市场高质量发展的指导意见》出台，实践中证券违法涉嫌证券犯罪的“应移尽移”。全年公安机关办理重大证券犯罪案件200余起，其中内幕交易、操纵市场等证券交易类犯罪案件高达130余起。中国证券犯罪领域的“严刑峻法”时代正当其时。

证券诉讼概览

总体而言，2025年因信息披露违法所引发的证券虚假陈述民事赔偿诉讼案件数量、标的总金额保持绝对高位，中国是全球证券诉讼最活跃、蕴含风险最大的法域之一，但就司法裁判层面而言，整体上趋于专业化、理性化和精细化。

股票虚假陈述诉讼，专业化和精细化审查成为主流

该类案件的主要争点在实践中已基本形成共识，虚假陈述重大性、交易因果关系、损失因果关系等要件抗辩得到裁判者的充分重视与认可，如举证充分、抗辩得当，被告有机会大幅减轻赔偿责任甚至免责。

债券虚假陈述诉讼，争议问题持续与探索并行

投资者损失是投资差额损失还是票面本息？虚假陈述的“重大性”在债券虚假陈述语境下应如何判定？损失因果关系的核定能否实现常态化与科学化？值得关注的是，上海金融法院在“华某债”案中委托第三方专业机构专项核定损失因果关系，或为破解损失认定的新路径。

证券诉讼解决机制创新，多元争议解决模式协同发展

代表人诉讼机制（包括特别与普通代表人诉讼）在2025年得到进一步实践，但“示范判决+平行案件”模式因其在效率与影响力间的平衡，仍是当前主流。同时，仲裁以其专业性与保密性优势，在解决债券虚假陈述等复杂商事纠纷中扮演着愈发重要的角色。

合规与诉讼风险应对指南

面对日趋严密的证券违法责任体系，证券市场参与者的应对策略应从“事后救火”向“事前防火”进行系统性升级。

强化证券合规内核与风险感知，“治未病”更为重要

必须深刻理解证券责任“立体化追责”的严峻性，将合规深度融入公司治理与决策流程。提升对商业伙伴、交易对手及交易安排的合规风险识别与评估能力，重视合规意识的提升与合规制度的建设。

高度重视有关风险信号，主动应对、尽早应对

市场参与者应高度重视交易所、证监机关的现场检查、问询、初步调查等动作，中介机构应高度关注其服务的发行人及其被调查的情况。须杜绝侥幸心理，做到响应迅速、准备全面、应对主动。一旦被正式立案调查，甚至被出具行政处罚事先告知书，更应高度警惕行政处罚程序所蕴含的民事、刑事责任风险，以前瞻思维预判并提前布局应对衍生法律风险，避免风险敞口的进一步扩大。

借助专业律师的力量，找到风险根源，对症施治、有效应对

中国证券监管与司法实践已经高度专业化，但专注于证券合规、诉讼业务和证券犯罪领域，具有丰富经验的律师数量很少。市场参与者应审慎遴选专业律师团队，借助专业律师的专业能力与经验，迅速识别风险点，通过细致的梳理、深入的研究与扎实的论证，妥善应对和化解证券合规与诉讼风险。