The Securities Law of the People’s Republic of China (PRC) is the basis for defining standard practices for share issuance and trading, as well as codes of conduct and penalties for violations within securities markets. The law aims to protect investors against unethical activities such as insider trading, market manipulation and fraud.

The China Securities Regulatory Commission (CSRC) and the Securities Association of China (SAC) were established in accordance with the Securities Law. The CSRC, as regulatory authority, sets qualification criteria and the code of conduct for those engaged in the securities business. The SAC, on the other hand, is a self-regulating organization for the securities market, supervising members’ conduct and imposing sanctions on members who violate securities laws or regulations. The Securities Law requires all securities companies in the PRC to join the SAC.

The CSRC must approve rules and guidelines governing securities trading at the Shenzhen and Shanghai stock exchanges (links provided below). The exchanges are mandated to impose disciplinary sanctions on any person engaged in securities trading found in violation of trading rules.