JC Master Legal News Issue 1194

Key Takeaways for This Issue

Two departments have issued the “Regulations on Rewarding Whistleblowers of Securities and Futures Law Violations.”
The China Securities Regulatory Commission and the Ministry of Finance recently issued the “Regulations on Rewarding Whistleblowers for Securities and Futures Law Violations” (hereinafter referred to as the “Reward Regulations”), which revise and improve the previously promulgated “Interim Regulations on Reporting Securities and Futures Law Violations” of 2014.
The General Administration of Customs has revised the Measures for the Administration of Credit of Registered and Filed Enterprises.
On January 13, the General Administration of Customs promulgated the Measures for the Administration of Credit of Enterprises Registered and Filed with the Customs of the People’s Republic of China (General Administration of Customs Order No. 282), which will take effect on April 1, 2026.
The State Administration for Market Regulation has released a batch of important national standards covering multiple fields.
On January 15, the State Administration for Market Regulation (National Standardization Administration) approved and released a batch of important national standards covering emerging fields, transportation and green low-carbon development, workplace safety, everyday life, government services, wind power generation systems, water conservation, agricultural products, and other areas.

Finance & Capital Markets

Two departments have issued the “Regulations on Rewarding Whistleblowers of Securities and Futures Law Violations.”
The China Securities Regulatory Commission and the Ministry of Finance recently issued the “Regulations on Rewarding Whistleblowers for Securities and Futures Law Violations” (hereinafter referred to as the “Reward Regulations”), which revise and improve the previously promulgated “Interim Regulations on Reporting Securities and Futures Law Violations” of 2014.
Under the “Reward Regulations,” a “whistleblower” refers to any entity or individual who is aware of illegal activities in the securities and futures markets, possesses relevant leads and evidence, is willing to assume responsibility for safeguarding the legitimate rights and interests of investors, and voluntarily submits information on such illegal activities to the China Securities Regulatory Commission.
Notably, the Rewards Regulations have significantly raised the reward thresholds: the reward amount has been increased from 1% to 3% of the fines and confiscated proceeds in each case. For those who provide leads on serious violations, the maximum reward has also been raised from RMB 100,000 to RMB 500,000. Where the case‑related information has a major national impact, involves an exceptionally large sum of money, or where the whistleblower is an insider with access to confidential information, the per‑case reward cap has been uniformly increased from RMB 300,000 or RMB 600,000 to RMB 1 million.
The China Securities Regulatory Commission has issued two financial industry standards for information systems in the securities and futures sector.
Recently, the China Securities Regulatory Commission released the “Guidelines on the Application of Cryptographic Technologies in Securities and Futures Information Systems” and the “Classification and Coding of Information Systems in the Securities and Futures Industry.”
The “Guidelines for the Application of Cryptographic Technologies in Securities and Futures Information Systems” sets out detailed requirements for the selection of cryptographic technologies, products, and services in the securities and futures industry. It specifies that national cryptographic algorithms such as SM2, SM3, and SM4 should be prioritized, and provides a tiered framework mapping confidentiality, integrity, authenticity, and non-repudiation to their corresponding cryptographic techniques. The document addresses four key security domains—physical and environmental security, network and communication security, device and computing security, and application and data security—listing typical use cases for cryptographic products such as access control systems, VPN security gateways, server‑side cryptographic modules, signature verification servers, dynamic password systems, and secure authentication gateways. It also aligns data protection requirements with the GB/T 39786 and GB/T 43697 standards for data classification and grading. Meanwhile, the “Classification and Coding of Information Systems in the Securities and Futures Industry” establishes an “8+1” classification framework—“general + eight categories of supervised institutions”—and adopts a three‑level coding structure: institution category–business classification–system technical functional domain. This standardizes the coding of system types across areas such as security protection, data center infrastructure, brokerage operations, credit services, asset management, and investment banking, resulting in a five‑character alphanumeric code system. This system serves as a standardized identifier for industry information system registration, governance, and cross‑institutional collaboration.
Two departments have issued the Measures on Information Disclosure for Charitable Trusts.
On January 15, the Ministry of Civil Affairs and the China Banking and Insurance Regulatory Commission jointly issued the “Notice on the Issuance of the Measures for the Disclosure of Information on Charitable Trusts.”
The Measures shall enter into force on April 1, 2026, and comprise twenty-six articles, providing detailed regulations on issues such as “who discloses, what is disclosed, where disclosure takes place, when disclosure occurs, and how violations are handled.” First, the Measures clarify the entities and platforms responsible for information disclosure, requiring civil affairs authorities, banking regulatory agencies, and trustees to disclose information in a unified manner on the National Charity Information Disclosure Platform, either ex officio or pursuant to contractual obligations; trustees may not substitute statutory disclosure obligations with press releases or advertising campaigns. Second, the Measures specify in detail the scope and time limits for information disclosure at each stage—establishment, amendment, re‑filing, and termination—of charitable trusts. In general, civil affairs authorities shall make filing matters public within twenty working days, while trustees, upon receipt of the relevant acknowledgment or submitted materials, must disclose within thirty days the trust’s purpose, duration, details of the settlor and supervisor, the scope and selection procedures for beneficiaries, the size and composition of the trust property, as well as the proportions of annual expenditures and administrative expenses. Third, separate disclosure requirements and a thirty‑day deadline are established for significant asset changes, major investments, substantial transactions, and fund transfers, with the stipulation that the specific criteria for “significant” must be set forth in the trust instrument. Fourth, trustees are required to disclose, at least once annually, the handling of trust affairs and the financial status, promptly publish information on transactions involving the settlor, the trustee, their management personnel, and the trust property, and inform beneficiaries of funding standards and operational procedures. Fifth, civil affairs authorities and banking regulatory agencies are mandated to disclose regulatory information, including inspection and evaluation results and administrative penalty outcomes, and may summon the heads of trustees for talks; at the same time, it is explicitly stated that state secrets, commercial secrets, personal privacy, as well as the settlor’s address and contact details if the settlor objects to disclosure, shall remain confidential. Sixth, legal liabilities are further refined: where trustees or trust companies fail to fulfill their information‑disclosure obligations in accordance with the law, civil affairs authorities or banking regulatory agencies shall impose administrative penalties and regulatory measures pursuant to the Charity Law, the Banking Supervision Law, and other relevant statutes; moreover, any unlawful or disciplinary misconduct by relevant personnel shall be investigated and held accountable in accordance with applicable laws and regulations.

Commercial & Corporate

The General Administration of Customs has revised the Measures for the Administration of Credit of Registered and Filed Enterprises.
On January 13, the General Administration of Customs promulgated the Measures for the Administration of Credit of Enterprises Registered and Filed with the Customs of the People’s Republic of China (General Administration of Customs Order No. 282), which will take effect on April 1, 2026.
The Measures clearly stipulate that customs enterprise credit ratings are divided into four categories: Authorized Economic Operator (AEO) enterprises, Certified Enterprises, Regular Enterprises, Dishonest Enterprises, and Seriously Dishonest Enterprises. AEO and Certified Enterprises are designated as China’s AEOs and are eligible for mutually recognized facilitation measures under the AEO framework. Customs authorities may collect credit information covering registration and filing, import‑export operations, administrative licensing, administrative penalties, joint incentives and sanctions, and AEO mutual recognition, and shall publicly disclose such information in accordance with the law. Enterprises are required to submit annual credit reports, and may file appeals against any inaccuracies in the disclosed information. The Measures further specify the criteria for determining “dishonest” and “seriously dishonest” status, taking into account factors such as the number and amount of administrative penalties, overdue tax payments and fines or confiscations, revocation of licenses, smuggling and intentional violations of export control laws, resistance to law enforcement, and bribery. They also set out procedures for applications by AEO and Certified Enterprises, on-site verification, review, downgrading, rectification, and withdrawal from certification, while imposing restrictions on the re‑certification of Dishonest and Seriously Dishonest Enterprises. Dishonest information is categorized as minor, general, or serious, with general and serious dishonesty subject to public disclosure periods of one year and three years, respectively. The Measures establish mechanisms for public disclosure on the “Credit China” platform, as well as procedures for applying for and reviewing credit restoration, and for cases where restoration is denied. In addition, they clearly define the rules governing the inclusion and removal of entities from the List of Seriously Dishonest Subjects.
The State Administration for Market Regulation has launched a pilot program on the management of pressure-bearing special equipment at chemical enterprises in 13 provinces and municipalities.
On January 15, the State Administration for Market Regulation issued a notice to launch a pilot program on integrity management of pressure-bearing special equipment at 21 chemical enterprises with established management systems in 13 provinces and municipalities, including Tianjin, Liaoning, Shanghai, and Jiangsu, thereby exploring new approaches to the scientific regulation of high-risk special equipment.
The pilot program focuses on pressure vessels, pressure pipelines, and other pressurized special equipment widely used by chemical enterprises. In response to the heightened risk of leaks, fires, and explosions under demanding operating conditions such as high temperature and high pressure, it establishes an equipment integrity management system centered on risk identification, risk assessment, risk monitoring, and risk control. This initiative aims to ensure that enterprises fulfill their primary safety responsibilities, strengthen systematic risk prevention and control, prevent and mitigate serious and extremely serious accidents, and guarantee the safe, reliable, and economical operation of equipment.
The State Administration for Market Regulation has released a batch of important national standards covering multiple fields.
On January 15, the State Administration for Market Regulation (National Standardization Administration) approved and released a batch of important national standards covering emerging fields, transportation and green low-carbon development, workplace safety, everyday life, government services, wind power generation systems, water conservation, agricultural products, and other areas.
In emerging fields, four industrial‑internet platforms, four digital supply‑chain frameworks, five integrated smart‑factory safety systems, and a national standard on the classification and comprehensive utilization of recyclable secondary rare‑earth resources have been released, supporting the large‑scale development of the industrial internet, the digitalization of supply chains, and the recycling and reuse of rare earths. In the areas of transportation and green, low‑carbon development, 23 national standards have been issued covering railway freight transport, intelligent transportation, and aviation services; seven standards address explosion‑proof industrial vehicles and off‑road forklifts; three pertain to multimodal transport service quality assessment and the integration of logistics with manufacturing; and 17 cover carbon dioxide capture, green‑factory evaluation, and greenhouse‑gas emission accounting. These standards promote efficient transport, the standardized development of industrial vehicles, the integration of logistics with industrial and supply chains, and the achievement of carbon neutrality goals.

Taxation

Two government departments have adjusted the export tax rebate policy for photovoltaic and other products.
The Ministry of Finance and the State Taxation Administration recently jointly issued the “Announcement on Adjusting the Export Tax Rebate Policy for Photovoltaic and Other Products” (Ministry of Finance and State Taxation Administration Announcement No. 2 of 2026).
According to regulations issued by two departments, effective April 1, 2026, the value-added tax export rebate for photovoltaic products and similar items will be abolished.
From April 1, 2026, to December 31, 2026, the value-added tax export rebate rate for battery products will be reduced from 9% to 6%; effective January 1, 2027, the value-added tax export rebate for battery products will be abolished.
With respect to the products subject to consumption tax as listed above, the export consumption tax policy remains unchanged, and the consumption tax refund (exemption) policy continues to apply.
The Ministry of Finance and the State Taxation Administration have extended the tax preferential treatment for interest income earned by overseas institutions from investing in domestic bonds.
On January 13, the Ministry of Finance and the State Taxation Administration issued the “Announcement of the Ministry of Finance and the State Taxation Administration on Extending the Implementation of Corporate Income Tax and Value-Added Tax Policies for Foreign Institutions Investing in the Domestic Bond Market” (Ministry of Finance and State Taxation Administration Announcement No. 5 of 2026), which stipulates that, from January 1, 2026, to December 31, 2027, preferential corporate income tax and value-added tax policies will continue to apply to bond interest income earned by foreign institutions investing in the domestic bond market.
The announcement clarifies that, from January 1, 2026, to December 31, 2027, corporate income tax and value-added tax will be temporarily exempted on bond interest income earned by foreign institutions investing in the domestic bond market. This temporary exemption does not apply to bond interest income derived by foreign institutions’ establishments or places of business within China that have a genuine connection to such entities. During the period of this policy’s extension, the overall tax burden on interest income generated by foreign institutions investing in the Chinese bond market through compliant channels will be significantly reduced; however, it remains necessary to determine whether the income is attributable to a domestic establishment or place of business and whether such income has a genuine connection to it, in order to correctly apply the tax‑exempt treatment.

Litigation & Arbitration

The Guangdong High People’s Court has released 10 typical cases on serving and safeguarding a law-based business environment.
The Guangdong Provincial Higher People’s Court recently released ten typical cases that support and safeguard the development of a law-based business environment. These cases cover such issues as rules governing the circulation of data elements, the coordination between shareholder derivative litigation in listed companies and the bankruptcy proceedings of controlling shareholders, inter‑provincial judicial carbon‑offset trading, maritime wind‑power insurance claims, illegal online fundraising, land expropriation and relocation for major green chemical projects, enforcement and disposal of key cultural‑tourism projects, substantive consolidation and reorganization of enterprises involved in Belt and Road initiatives, pre‑reorganization procedures for key listed companies, and the resolution of collective disputes arising from false statements in securities.
The case clearly established that the unauthorized invocation of server APIs to extract backend data constitutes unfair competition and ordered substantial damages; it upheld the right of investor protection organizations to bring derivative shareholder lawsuits, holding controlling shareholders and directors, supervisors, and senior executives accountable; it pioneered a novel approach by using inter‑provincial judicial carbon‑offset restoration as an alternative to administrative penalties; it appropriately defined the duty of disclosure for insurance coverage of offshore wind‑power equipment, thereby supporting claims settlement; it imposed severe penalties on illegal fundraising schemes involving sums in the tens of billions of yuan; it legally supported the expropriation and relocation associated with major energy and chemical projects, as well as the comprehensive auction and disposal of key cultural‑tourism projects; and it rescued enterprises involved in Belt and Road initiatives and pivotal listed companies through substantive consolidation in reorganization and a “pre‑reorganization plus diversified repayment mechanisms” framework, thereby safeguarding financial stability and supply‑chain security.
Shanghai, Jiangsu, Zhejiang, and Anhui have issued the 2.0 version of regulations on exempting or imposing lenient penalties for minor violations in the Yangtze River Delta region.
Recently, the market regulation authorities of Shanghai Municipality, Jiangsu Province, Zhejiang Province, and Anhui Province jointly issued the “Regulations on Exempting Minor Violations in the Field of Market Regulation in the Yangtze River Delta Region from Penalties and Applying Lenient or Reduced Penalties (Version 2.0),” which will officially come into effect on February 1, 2026.
The “Regulations (Version 2.0)” have been expanded from the original 19 articles to 26, with a focus on refining the criteria for applying exemptions from penalties for minor violations, as well as the conditions and discretionary factors for imposing lighter or reduced penalties, and on improving comprehensive discretionary rules and enforcement procedural requirements. For violations in emerging industries, new business forms, and novel business models—including those related to artificial intelligence—the Regulations explicitly stipulate that, while adhering to the law, a tolerant yet prudent regulatory approach shall be adopted, with corrective measures urged through persuasion, education, guidance, and admonitory interviews. In response to the relatively general provisions on “lighter” and “reduced” penalties in the Administrative Penalty Law, these Regulations, for the first time across the national market regulation system, clearly distinguish the primary considerations underlying each category. They further provide that, where an unlawful act does not fully meet the statutory conditions for exemption from penalty but the circumstances are minor and applying the minimum level of sanction would still be manifestly unfair, reduced penalties may be imposed in accordance with the law. The document further specifies the criteria for determining five categories of cases eligible for lighter or reduced penalties, as well as the discretionary standards for situations where no penalty is imposed—such as when the violation is minor, the resulting harm is slight, corrective action is taken promptly, the offense is committed for the first time, or there is no subjective fault—while also clarifying, for example, that the period of time considered for a first-time violation is two years.

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