Goldman Sachs Group Inc will pay $22 million to settle allegations by Chinas securities regulator over how the firm interacted with its local joint venture, the first such agreement under pilot rules the nation adopted in 2015.

The China Securities Regulatory Commission agreed with Goldman Sachs under guidelines that allow it to negotiate a settlement rather than to simply issue a fine. The deal relates to how Goldman Sachs’ Asia unit worked with the company’s onshore joint venture on its trading business. Employees at both entities have agreed to step up internal controls, the CSRC said in a statement late Tuesday.

The settlement underscores Chinese regulators willingness to use new approaches to supervision as they increase scrutiny of financial markets. Fines and confiscations levied by the CSRC reached a record $1.59 billion last year, according to official data.

This case represents a major breakthrough in the history of Chinas securities regulatory and administrative law enforcement, said Melody Yang, a Beijing-based partner at Simmons & Simmons. We expect this approach will be more widely accepted by the market.

We are pleased to have resolved the matter, a spokeswoman for Goldman Sachs said.

Between October 2013 and July 2015, traders at Goldman Sachs’ Asian unit used Goldman Sachs Gaohua Securities accounts to carry out trades and provided business guidance to the joint ventures staff, according to the CSRC notice.

The two parties engaged in other related stock and stock index futures contract transactions during four trading days from May to July 2015, the notice said. During those three months, the Shanghai Composite Index slumped 18 per cent as turmoil gripped Chinese markets.

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