China’s securities regulator has set 1 December for new rules that place a more detailed framework around penalties for unlawful securities transfers. Published 19 October after a spring consultation, the 18-article measure distinguishes different types of breaches and the circumstances that raise or reduce the resulting penalty.[1]
The CSRC says the 2019 Securities Law had already widened the relevant offences beyond statutory lock-up periods to cover sale timing, quantities, methods and disclosures. The new framework gives enforcement staff more specific criteria within that legal structure, following the broader administrative-penalty discretion rules introduced in 2025.[3]
Severity combines two measures. A transfer below 2% of the listed company’s total share capital, or below RMB 40 million in value, falls in the lower tier. The higher tier requires at least 5% and at least RMB 500 million. Cases between those conditions fall in the ordinary tier, subject to adjustments.[2]
Ordinary-tier fines as a share of the unlawful transfer value
| Measure | Value | Context |
|---|---|---|
| Pre-IPO shares sold during their statutory lock-up | 30%–50%. | Source 2 |
| Other specified lock-up or sale-timing breaches | 20%–30%. | Source 2 |
| Sale-quantity or disclosure-related breaches | 10%–20%. | Source 2 |
Acquisition-related breaches have a separate calculation based on unlawful gains, including fixed monetary ranges where gains are absent or small. The framework also permits adjustments for mitigating or aggravating conduct and market bans in serious cases. The table therefore describes selected ordinary-tier bands, not every possible final sanction.[2]
The regulator’s accompanying explanation emphasises attempts to evade restrictions through transaction structures or financial instruments. It also distinguishes a group acting together in a shared violation from a case where only particular members transferred securities and were at fault. Liability is tied to the conduct established, rather than assumed solely from membership of a concert party.[3]
For brokers arranging disposals by major shareholders or company insiders, the practical relevance is the combination of transaction route, holding restrictions, size and disclosure history. A sale’s value alone will not locate it within the framework. The December start gives affected market participants a defined point for updating their procedures and communications.[1]
Sources & further reading
- Final rules on unlawful securities-transfer penalties China Securities Regulatory Commission · 19 Oct 2026 · Accessed 21 Oct 2026
- Administrative penalty rules for unlawful securities transfers China Securities Regulatory Commission · 19 Oct 2026 · Accessed 21 Oct 2026
- Official questions and answers on transfer penalties China Securities Regulatory Commission · 19 Oct 2026 · Accessed 21 Oct 2026