Methods of dealing with illegal fundraising
Investigation and determination
For the following acts within the administrative area, suspected of illegal fundraising, the lead department for the disposal of illegal fundraising shall promptly organize the relevant industry authorities, regulatory departments, branches and dispatched agencies of the financial management department to investigate and identify:
1. Establish Internet enterprises, investment and investment consulting enterprises, various trading venues or platforms, professional farmer cooperatives, mutual fund organizations, and other organizations to absorb funds;
2. Absorbing funds in the name of issuing or transferring equity and creditor's rights, raising funds, selling insurance products, or engaging in various types of asset management, virtual currency, financial leasing business, etc.;
3. Absorb funds in the form of promised payment of returns such as currency, equity, and in-kind returns in the form of sales of goods, provision of services, investment projects, etc.;
4. Violating laws, administrative regulations, or relevant state provisions by publicly disseminating information on the absorption of funds through mass media, instant messaging tools, or other means;
5. Other suspected illegal fundraising.
Investigative measures
The lead department for the disposal of illegal fundraising may take the following measures to organize an investigation of suspected illegal fundraising:
1. Entering the premises suspected of illegal fundraising to conduct investigation and collect evidence;
2. Question units and individuals related to the matter under investigation and ask them to explain the relevant matters;
3. Consult and copy documents, materials, electronic data, and so forth related to the matter under investigation, and seal documents, materials, and electronic equipment that may be transferred, concealed, or destroyed;
4. With the approval of the principal responsible person of the lead department for the disposal of illegal fundraising, inquire into the relevant accounts suspected of illegal fundraising in accordance with law.
There must not be less than 2 investigators, and law enforcement identification shall be presented. Units and individuals related to the matter under investigation shall cooperate with the investigation and must not refuse or obstruct it.
Disposal measures
According to the needs of disposing of illegal fundraising, the lead department for the disposal of illegal fundraising may take the following measures:
1. Seal up the relevant business premises, seal up or seize the relevant assets;
2. Order the illegal fundraiser and the illegal fundraiser to recover and sell the relevant assets for the purpose of returning the fundraising funds;
3. Upon the decision of the lead department for the disposal of illegal fundraising by the local people** at or above the districted city level, notify the exit/entry border inspection authorities in accordance with the provisions to restrict the exit of the controlling shareholders, actual controllers, directors, supervisors, senior managers and other directly responsible personnel of the illegal fundraising individuals or illegal fundraising units.
The adoption of the measures provided for in items (1) and (2) of the preceding paragraph shall be subject to the approval of the principal responsible person for the lead department for the handling of illegal fundraising.
Liquidation of funds
Liquidation of raised funds** includes:
1. The balance of funds illegally raised;
2. The proceeds of illegal fund-raising funds or other assets converted therefrom;
3. The economic benefits obtained by the illegal fundraiser and its shareholders, actual controllers, directors, supervisors, senior managers and other relevant persons from the illegal fundraising;
4. Illegally raised funds or related assets concealed or transferred by illegal fundraisers;
5. Economic benefits such as advertising fees, endorsement fees, premium fees, benefit fees, rebate fees, commissions, and commissions obtained in illegal fundraising;
6. Other assets that can be used as funds for the liquidation of raised funds.
Prevention of illegal fundraising
1. Strict supervision: Local people at all levels shall establish a monitoring and early warning mechanism for illegal fundraising, incorporate it into the comprehensive management system of social security, give play to the role of grid management and grassroots mass autonomous organizations, and use modern information technology means such as big data to strengthen the monitoring and early warning of illegal fundraising.
The competent departments and regulatory departments of the industry shall strengthen routine supervision and management, and be responsible for the risk investigation, monitoring, and early warning of illegal fundraising in their respective industries and fields.
2. Strict access: The supervision and management departments shall strengthen the management of commercial registration such as the names and business scope of enterprises and individual industrial and commercial households. Except as otherwise provided by laws, administrative regulations and the state, the names and business scope of enterprises and individual industrial and commercial households shall not contain words or content such as "finance", "exchange", "trading center", "wealth management", "wealth management", "equity crowdfunding", etc.
III. Management of Advertising Information: Except as otherwise provided by the State, no unit or individual may publish advertisements containing fundraising content or otherwise conduct fundraising publicity to the public.
The departments for market regulation are to strengthen the monitoring of advertisements suspected of illegal fundraising, in conjunction with the departments leading the handling of illegal fundraising. Where the lead department for handling illegal fundraising is found to be illegal fundraising, the market regulation departments shall promptly investigate and handle the relevant illegal fundraising advertisements in accordance with law.
Advertising agents and advertisement publishers shall inspect relevant supporting documents and verify the content of advertisements in accordance with laws and administrative regulations. Advertising agents must not provide design, production, or services for advertisements that do not have relevant supporting documents and contain fundraising content, and the advertisement publishers must not publish them.
IV. Obligations of Financial Institutions: Financial institutions and non-bank payment institutions shall perform the following obligations to prevent illegal fundraising:
1) Establish and improve the internal management system, prohibit branches and employees from participating in illegal fundraising, and prevent others from using their business premises and sales channels to engage in illegal fundraising;
2) Strengthen publicity and education on the public's prevention of illegal fundraising, and set up warning signs in conspicuous positions in business premises;
3) Strictly implement the reporting system for large-value transactions and suspicious transactions in accordance with the law, analyze and identify the relevant accounts suspected of abnormal flow of illegal fund-raising funds, and promptly report the relevant situation to the local branches of the financial management department, the dispatched agency and the leading department for the disposal of illegal fundraising.
V. Publicity and education: Local people at all levels shall carry out normalized publicity and education efforts on the prevention of illegal fundraising, make full use of all kinds of media or carriers, and publicize the illegality, harmfulness and manifestations of illegal fundraising to the public through methods such as legal and policy interpretation, analysis of typical cases, and investment risk education, so as to enhance the public's awareness of the prevention of illegal fundraising and their ability to identify.
Industry regulatory departments, regulatory departments, industry associations, and chambers of commerce shall, on the basis of the characteristics of the risk of illegal fundraising in their respective industries and fields, carry out targeted publicity and education activities on the prevention of illegal fundraising.
News shall carry out public interest publicity on the prevention of illegal fundraising, and conduct supervision of illegal fundraising in accordance with law.
6. How to report: Any unit or individual has the right to report suspected illegal fundraising to the lead department for handling illegal fundraising or other relevant departments.
The State encourages the reporting of suspected illegal fundraising. The lead department for the handling of illegal fundraising and other relevant departments shall disclose the reporting methods such as the report and the mailbox, set up a report column in the report, accept the report, handle it in a timely manner in accordance with the law, and keep the informant confidential.
*: Netinfo Huocheng.
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