Are party members and cadres prohibited from buying and selling stocks and investing in securities in the future?

According to Article 88 on “engaging in profit-making activities in violation of relevant regulations”, are party members and cadres prohibited from buying and selling stocks and investing in securities in the future?

Central Commission for Discipline Inspection and Regulation Office:Article 88 of the "Regulations on Disciplinary Punishment of the Communist Party of China" is about the punishment for violating relevant regulations and engaging in profit-making activities. Among them, item (3) lists "buying and selling stocks or making other securities investments" as one of the disciplinary violations. To fully understand this provision, you need to pay attention to the following points:

First of all, the "Regulations on Disciplinary Punishment of the Communist Party of China" does not change the provisions of the original regulations. Item (2) of Article 77 of the original regulations lists "individuals buying and selling stocks or making other securities investments in violation of regulations" as one of the disciplinary violations. The expression "violation of regulations" is repeated with the expression "violation of relevant regulations" at the beginning of the first paragraph of the article. During the revision process, we deleted “individual violation of regulations” to avoid duplication, and the substantive content remained unchanged.

Regarding the issue of buying and selling stocks, we have gone through a process from being completely prohibited to gradually relaxing it. In October 1993, the Party Central Committee and the State Council issued regulations prohibiting leading cadres at or above the county (division) level of party and government agencies from buying and selling stocks. Under the historical conditions at that time when the national securities market regulatory mechanism was not sound, this provision played an important role in promoting the integrity and self-discipline of leading cadres of party and government agencies and ensuring the healthy development of the securities market. With the gradual improvement of my country's securities industry regulatory system, especially the promulgation and implementation of the Securities Law, the management of the securities market has become more and more standardized. Therefore, in April 2001, the Party Central Committee and the State Council decided to relax the regulations on stock trading for leading cadres at or above the county (division) level of party and government agencies with restrictions, and issued the "Several Provisions on the Personal Securities Investment Behavior of Party and Government Organ Staff."

According to this regulation, the following categories of persons are mainly prohibited from buying and selling stocks: (1) Persons in charge of listed companies and the competent departments of state-owned holding units of listed companies who possess inside information, as well as their parents, spouses, children, and their spouses are not allowed to buy or sell the stocks of listed companies managed by the above-mentioned competent departments. (2) Staff members of the State Council’s securities regulatory agency and its dispatched offices, stock exchanges and futures exchanges, as well as their parents, spouses, children and their spouses, are not allowed to buy or sell stocks. (3) If my parents, spouse, children, and their spouses work in securities companies, fund management companies, or in accounting (auditing) firms, law firms, investment consulting agencies, asset appraisal agencies, and credit rating agencies that have been granted securities and futures qualifications by the Securities Regulatory Authority of the State Council, the staff of the party and government agencies are not allowed to buy or sell the stocks of listed companies that have business relationships with the above-mentioned agencies. (4) Party and government agency staff who possess inside information will continue to be bound by this provision within three months of leaving their posts. For party and government agency staff who have inside information due to their new position, the stocks and securities investment funds held before taking office must be disposed of within one month after taking office and may not be continued to be held.

Attachment: Original report link

http://www.ccdi.gov.cn/hdjl/hfxd/201511/t20151120_66318.html