China’s Securities Regulator Pushes for Greater Adoption of Regtech

The China Securities Regulatory Commission (CSRC) is pushing for the greatest adoption of regtech measures amidst broader efforts by Beijing to rein in the Chinese financial sector.

At a specialist study meeting convened by CSRC towards the end of last year, CSRC chief Liu Shiyu (刘士余) called for the “vigorous advancement of scientific and technological regulation, raising the scientific and technological level and smart capabilities of regulation [and] making use of new technologies including big data, cloud computing and artificial intelligence.”

CSRC has since adopted its first official measure to advance the adoption of regtech, with the release of the “Inspection and Enforcement Science and Technology Establishment Work Plan” (稽查执法科技化建设工作规划) on 25 May.

“[We] must firmly implement the scientific and technological enforcement work plan, focus on advancing data collection and data analysis projects, and rapidly implement deep identification of non-compliant, illegal conduct,” said a CSRC official at a Shenzhen research meeting in Shenzhen.

According to the official CSRC will  also “make science and technology the driver, and raise smart capabilities for lead analysis and processing.”

The plan itself outlines six key regtech projects for improving CSRC’s enforcement capabilities, including a data concentration project, data modelling project, evidence collection software project, quality control project, case management project and investigation assistance project.

It points to the future establishment of a big data enforcement platform, the use of smart technology to help resolve cases, the development of a standardised electronic evidence collection tool for collecting information on the links between entities, funds and transactions, and the establishment of a smart control system for inspection of evidence, assessment of conduct and determination of punishments.

CSRC will implement the automated management and control of information and procedures in relation to the full investigation and penalisation process, covering all stages from investigation, assessment, punishment, review and appeal.

CSRC’s regulatory efforts and investigatory workload have expanded considerably in recent years, with its investigatory department processing 1,228 case leads and launching 1029 investigations in the past near-two year period, with a case completion rate of 60%.

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