CHINA’S Supreme People’s Court published rules Friday that will make it easier for victims of securities fraud to claim compensation in China’s latest step to stamp out corporate cheating and protect investors interests.

The new rules will take effect Jan. 22 and allow investors to bring cases independently of any action by the securities regulator, representing a major step that will help deepen capital market reforms, the China Securities Regulatory Commission (CSRC) said in a statement on its website.

The rules come as China plans to expand a reform of initial public offerings (IPOs) this year. Under the reform, China is moving from a regulatory approval IPO system to a U.S.-style registration-based system, making investors more responsible for their own investments.

The CSRC has repeatedly vowed “zero tolerance” against securities fraud in capital markets, which China hopes can attract more private money to fund innovation and economic growth.

The CSRC said that the new rules will target controlling shareholders as “chief evils” in fraud cases, curb “deceptive” restructurings and hold accomplices responsible.

In November, the Guangzhou Intermediate People’s Court ruled against Shenzhen-listed Kangmei Pharmaceutical Co. and some of its former executives, handing victory to investors in China’s first class-action lawsuit against corporate securities fraud and hailed by China’s securities regulator as a “milestone” event in the country’s capital markets.

Under the ruling, Kangmei must pay 55,326 investors a total of 2.46 billion yuan (US$385.51 million) to reimburse their losses. Former chairman Ma Xingtian and his wife, as well as four former executives, are liable for the obligations.

Kangmei was engaged in intentional and systematic financial cheating worth 30 billion yuan between 2016 and 2018, the CSRC has concluded.

(SD-Agencies)