China’s securities regulator, responding to public uproar over a vaccines scandal, has strengthened the expulsion rules on the country’s equity exchanges, laying the groundwork for kicking out culpable producers from the capital market.

Stock exchanges should take the lead to delist, or suspend any listed company that’s involved in fraud, any violations of disclosure rules, or whose action “threatened public health, national or ecological security,” the China Securities Regulatory Commission said, citing revised listing regulations released on late Friday night.

The revised rules give teeth to a regulatory framework that has otherwise stood powerlessly by while dozens of companies continued to raise funds through Asia’s biggest capital market, even after they’ve been held responsible for pollution, corporate malfeasance or producing substandard foodstuff and medicine.

“This is significant change,” said Xu Feng, a senior partner at Shanghai Trend Law Firm, according to the China Economics Weekly. “There will be additional delistings because of the added criteria.”

China has been roiled in recent weeks by revelations that several vaccine producers had falsified their inspection and manufacturing records, releasing hundreds of thousands of doses of ineffective or substandard medicine into the market. President Xi Jinping ordered a thorough investigation, and Premier Li Keqiang dispatched a task force to crack down on substandard producers nationwide.

Shenwan Hongyuan Medical and Biotech Index, which tracks the performance of 283 companies in the health care and pharmaceuticals sector, lost 2.9 per cent this week, the worst performing sector on the stock market.

In the furore, Changsheng Bio-technology was held as the case in point. The Shenzhen-listed company sold 250,000 doses of substandard vaccines for diphtheria, pertussis and tetanus, and tampered with the production data of its rabies vaccine. Up to 16 executives were detained by police, but the company’s stock remained listed, falling everyday by the 10 per cent daily limit for nine consecutive days since the scandal broke.

Changsheng, based in Jilin province, has lost 13.5 billion yuan (US$2 billion), or half of its market value, in two weeks. An investigation team sent by the State Council, China’s cabinet, on Friday concluded that the company had violated government-approved production procedures to reduce costs and to get more drugs through the quality control standards. The company discarded records and planned to destroy 60 computer hard drives, in a cover-up to wipe out incriminating data, according to Xinhua News Agency.

This wasn’t the Chinese regulator’s first attempt at imposing discipline. It drafted a set of delisting rules in March to solicit public opinion That draft, however, only listed fraud, violations in major information disclosure, and criminal offences as grounds for expulsion.

“When we talk about breaching the law, the parameter should not include only the securities regulations, but also involve the Drug Administration Law,” said Liu Junhai, director of the Commercial Law Study Centre at the Renmin University in Beijing, according to China Economics Weekly.

The latest amendments would improve the vitality of the stock market and strengthen governance, the regulator said.

When it comes to major law-breaching cases that harm market order and public interests that caused significant social impact, “forced delisting would be resolutely executed,” the regulator said.