China Securities Regulatory Commission: Proposes to Explicitly Support and Encourage the Implementation of Advance Compensation

The China Securities Regulatory Commission has drafted the "Guiding Opinions on Advance Compensation in the Securities Market (Draft for Comment)" and is now soliciting public comments. The document states that it will explicitly support and encourage the implementation of advance compensation. First, on the basis of the Securities Law which stipulates that advance compensation entities have the right of recourse, it further clarifies that advance compensation entities may obtain advance compensation related materials from the China Securities Investor Protection Fund Corporation after completing advance compensation for recourse purposes (Article 15). Second, it specifies that the China Securities Regulatory Commission may, in accordance with laws and regulations, take advance compensation related circumstances into consideration as factors for administrative license review, administrative penalty discretion, and securities and futures market integrity supervision and management (Article 18).

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