Core Viewpoint - The regulatory authorities are intensifying efforts to combat financial fraud in the capital market, particularly targeting third-party companies that facilitate such fraud for listed companies [1][2][3]. Group 1: Regulatory Actions - The China Securities Regulatory Commission (CSRC) is working on legislative changes to empower itself to impose administrative penalties on third-party companies involved in financial fraud [2][11]. - The CSRC has initiated a mechanism to transfer leads on fraudulent third parties to relevant government departments for legal action, which has already shown initial effectiveness [2][12][13]. - There is a notable increase in the number of listed companies facing criminal charges, with eight companies involved in criminal cases since July, and nearly twenty since early 2025 [1][4]. Group 2: Third-Party Involvement - Third-party companies that assist in financial fraud are often small, unlisted shell companies, making their fraudulent activities harder to detect [5][9]. - The involvement of third parties in financial fraud typically includes complex operations that obscure the true nature of transactions, such as mixing genuine and fake business activities [4][6]. - Specific cases, such as the Saiwei Intelligent case, illustrate how third parties like Shenzhen Haotian and Guangzhou Gaozhuo facilitated significant financial misreporting, including the transfer of over 1.2 billion yuan [7][8][9]. Group 3: Legal Precedents - The first administrative penalty against a third-party company involved in fraud occurred in the Yuebo Power case, where two individuals were fined a total of 2.3 million yuan [3][13]. - The Saiwei Intelligent case also marked a significant legal precedent, where a third-party company was held liable for 3% of the damages in a civil compensation case [3][13].

Core Viewpoint - The China Securities Regulatory Commission (CSRC) has proposed administrative penalties against Yu Bo Power for violations related to information disclosure, marking a significant step in holding third-party accomplices accountable for financial fraud in the capital market [1][4]. Group 1: Regulatory Actions - The CSRC plans to impose fines of 2 million yuan and 300,000 yuan on two individuals who facilitated Yu Bo Power's fraudulent activities, highlighting the regulatory body's commitment to tackling financial misconduct [1]. - The investigation revealed that from 2018 to 2022, Yu Bo Power inflated its revenue and profits through fictitious sales of new energy vehicle powertrains and false asset sales, leading to false records in annual reports [1][2]. Group 2: Legal Framework - Current laws, such as the Securities Law, lack specific provisions for holding third-party accomplices accountable for corporate fraud, which has allowed these entities to evade regulatory scrutiny [1][2]. - The CSRC's decision to classify third-party involvement in fraud as "joint illegal behavior" is a pioneering move that aims to enhance accountability and deter future misconduct [1][3]. Group 3: Implications for the Market - By holding third parties accountable, the CSRC aims to disrupt the ecosystem of financial fraud, thereby protecting investor interests and restoring market credibility [1][4]. - The proposed regulatory changes, including the introduction of a new management regulation for listed companies, are expected to clarify the legal responsibilities of third parties involved in fraudulent activities [3][4].

Core Viewpoint - The article presents six recommendations from Jia Wenqin, the director of Beijing Securities Regulatory Bureau, aimed at improving the capital market, including measures to combat financial fraud, revise the Securities Investment Fund Law, and enhance the governance of illegal internet financial activities [1]. Group 1: Strengthening Regulations Against Financial Fraud - Jia Wenqin emphasizes the need for stricter accountability for third parties involved in financial fraud, suggesting amendments to the Securities Law and the introduction of regulations to clarify the legal responsibilities of these parties [2]. - The proposal includes enhancing the collaborative mechanism for addressing third-party fraud and improving the reporting and processing of fraud-related leads [2]. Group 2: Revising the Securities Investment Fund Law - The recommendation to amend the Securities Investment Fund Law aims to include private equity funds under its scope and adapt regulations to current industry developments [3]. - Suggestions include broadening the investment scope for public funds and establishing a liquidity support mechanism for public funds [3]. Group 3: Improving Special Representative Litigation System - The article discusses the importance of the special representative litigation system in protecting investors' rights and increasing the cost of illegal activities in the capital market [4]. - Recommendations include simplifying the initiation process for special representative litigation and expanding the range of entities that can initiate such lawsuits [5]. Group 4: Facilitating Subrogation Lawsuits by Investor Protection Agencies - Jia Wenqin highlights the challenges faced by investor protection agencies in initiating subrogation lawsuits and suggests developing judicial interpretations to clarify procedures and enhance the effectiveness of this system [6]. Group 5: Developing S Funds and Diversifying Exit Channels - The article introduces the concept of S Funds, which are private equity secondary market funds, and emphasizes their role in providing exit strategies for private equity and venture capital investments [7]. - Recommendations include encouraging participation from state-owned capital and insurance companies in the S Fund market and optimizing tax policies related to fund share transfers [7]. Group 6: Strengthening Governance of Illegal Internet Financial Activities - Jia Wenqin calls for enhanced governance of illegal internet financial activities, proposing the establishment of standards for financial information content on internet platforms and improved regulatory collaboration [8]. - The use of technology, such as big data and artificial intelligence, is recommended to enhance the identification and management of illegal financial activities [8].