Core Viewpoint - The China Securities Association is revising the "Management Measures for the Reputation Information of the Securities Industry," marking the first adjustment since its implementation in 2022. The revisions focus on two main areas: including bribery that interferes with regulatory enforcement in the category of unlawful dishonesty, and providing a waiver channel for securities firms to mitigate investor losses through a proactive compensation mechanism [1][2]. Group 1: Proactive Compensation Mechanism - The revised draft specifies that if an issuer causes losses to investors due to fraudulent issuance or false statements, the relevant securities company can apply to the China Securities Association for exemption from recording related administrative penalty information in the reputation information database if they proactively reach a compensation agreement with the affected investors [1]. - This mechanism reflects the regulatory authority's encouragement of proactive compensation by securities firms, linking the initiative to reputation evaluation, which compels firms to be more prudent in due diligence, material verification, and ongoing supervision [1]. - The design of this system aims to optimize investor relief efficiency and shorten the rights protection cycle, allowing investors to receive compensation more quickly and avoid additional losses from lengthy litigation processes [1]. Group 2: Inclusion of Bribery in Dishonesty Category - The revisions implement the China Securities Regulatory Commission's directive to "investigate both bribery and receiving bribes together," including information on administrative penalties and disciplinary actions for interference with regulatory enforcement through improper means such as bribery [2]. - Even if the circumstances are minor and no penalties are imposed, information recognized by disciplinary inspection or administrative supervision agencies will also be included in the category of unlawful dishonesty [2]. - By incorporating bribery interference into reputation management, involved institutions and individuals will face joint penalties across the industry, which serves as a significant measure for the regulatory authority to purify the market ecosystem and maintain enforcement authority [2].

Core Viewpoint - The China Securities Association (CSA) has revised the "Management Measures for the Management of Securities Industry Practitioners' Reputation Information," marking the first adjustment since its implementation in 2022, aimed at enhancing the reputation management mechanism in the industry [1] Group 1: Changes in Regulations - The revision includes three major changes: first, bribery and other means that interfere with regulatory enforcement will be classified as illegal and dishonest behavior [2] - Second, it encourages securities firms to proactively compensate for losses caused by fraudulent issuance, allowing those who take the initiative to mitigate investor damages to avoid being recorded in the reputation information database [3] - Third, the source of integrity information has been improved, shifting from the China Securities Regulatory Commission's integrity archive database to self-reporting by members [2] Group 2: Implications for Market Conduct - The inclusion of bribery in the reputation management framework is seen as a significant step by regulators to purify the market environment and uphold enforcement authority [2] - The CSA maintains a strict stance against bribery among securities practitioners, with a "zero tolerance" approach to bribery in capital markets [2] - The new provisions are expected to guide securities firms to voluntarily compensate affected investors, thereby reducing the cost and duration of investor rights protection [3]