(ECNS) – The China Securities Regulatory Commission (CSRC) has issued a policy to encourage financial whistleblowers with cash rewards.
Information of "average importance" will be worth up to 100,000 yuan ($16,000), while information of "high importance" will earn informants as much as 300,000 yuan ($48,000). The CSRC said it will also take measures to protect from retaliation any individuals who report wrongdoings on the securities market.
In recent years, China's financial market has seen an increasing number of violations regarding false statements, market manipulation and insider trading. Although authorities have been enhancing law enforcement, the number of cases detected is still limited.
But will the new policy work wonders?
Song Yixin, a lawyer based in Shanghai, said the reward is too small to actually spur tip-offs, as financial transactions may involve hundreds of millions or even billions of yuan.
Song said Western countries don't set a limit on the reward. For example, the U.S.'s Dodd-Frank Act in 2010 awards whistleblowers 10 to 30 percent of any monetary recovery of over $1 million.
However, Zang Xiaoli, an attorney at the Beijing Yingke Law Firm, says the amounts the CSRC has set are "appropriate," as huge rewards may lure individuals to exaggerate or fabricate information.
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