(Yicai Global) July 7 -- China’s cabinet has called for tougher monitoring of how its big tech titans collect and use consumer data and will step up regulatory oversight of companies trading in overseas markets, especially concerning the cross-border transfer of classified data, as the country’s crackdown on wayward internet-based giants intensifies.

The government will improve laws and regulations on data security, cross-border data flow and confidential information management, according to guidelines released by the State Council yesterday. It will also revise rules on strengthening confidentiality and data management for offshore listings, and will make companies listed overseas responsible for storing their data safely.

The move comes four days after the Cyberspace Administration of China launched a cybersecurity probe into Didi Chuxing, accusing the Chinese ride-hailing giant of using illegal means to harvest and use consumer data. The announcement sent the Beijing-based firm’s mega initial public offering on the New York stock exchange last week into freefall with its stock losing a quarter of its value since June 30.

More efforts will be made to severely punish illegal activities in the securities market, speed up the improvement of the securities’ law enforcement and judicial systems, impose tougher punishments for major financial violations and strengthen cross-border supervision and law-enforcement cooperation, the document said.

It is necessary to modify judicial interpretations on civil compensation cases arising from false statements, revoke the pre-litigation process for civil compensation and pilot securities' arbitration programs, the guidelines said.

The securities’ law enforcement and judicial systems should have the mechanisms in place to deal with any such violations by next year, and these legal systems should be standardized, perfected and ready to serve as a bridge between law enforcement and the courts by 2025, it added.

The guidelines also called for making full use of existing judicial resources to strengthen local financial trial power in Beijing as well as the cities of Shanghai and Shenzhen where the mainland stock exchanges are located. China already has financial courts in Beijing and Shanghai and is preparing to open another in Shenzhen.

The China Securities Regulatory Commission and related departments will set up a special co-ordination group to better address important cases with regard to securities law violations. They will also update the Provisions on Strengthening the Relevant Confidentiality and Archives Management Work Relating to the Overseas Issuance of Securities and Listing formulated in 2009 to safeguard against data security risks.

Editor: Kim Taylor