China fleshes out collective mechanism for securities disputes

Source: Xinhua| 2020-08-01 00:11:13|Editor: huaxia

BEIJING, July 31 (Xinhua) -- China's supreme court has released a 42-article regulation to facilitate collective proceedings for securities disputes, and protect individual investors' interests.

The regulation, enacted on Friday, specified the litigation rules and procedures for the trial of a case where an ordinary or special representative action is applicable, according to Liu Guixiang, a member of the judicial committee of the Supreme People's Court.

Investors are deemed in the class by default unless they make an affirmative request of exclusion, according to the regulation on the court's website. This is expected to lower the threshold for individual investors to bring collective redress.

The document also tries to shorten the traditionally prolonged litigation process, and boost the efficiency of class actions, said Liu.

It stipulates that a representative action adopts the mode of special authorization, which means representatives are entitled to exercise a series of rights on behalf of class members, including the right to revise or forgo their litigation requests, to reach a mediation agreement with defendants, and to bring or drop their appeals to a higher court.

Individual investors' procedural rights and interests are also emphasized in the document. Every investor holds one ballot in voting for his or her representatives, according to the document. They could also opt out if they disapprove of the performance of their representatives, it added. Enditem