What Is the China Securities Regulatory Commission?

China Securities Regulatory Commission (CSRC) is the national regulatory body that oversees the securities and futures exchanges 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.

Understanding the China Securities Regulatory Commission

According to the China Securities Regulatory Commission (CSRC) website, 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 monitoring of overseas futures activity of domestic institutions
  • Control of the 36 affiliated bureaus and their managers
  • Approval and regulation of fund management companies, securities depository and clearing corporations, futures 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 firm 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.

The Heavy Hand of 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 CSRC had to police its own. In 2017, the head of the 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.