System convergence and rule refinement
Article 95 of the new "Securities Law" is the basic norm about the litigation of securities dispute representatives, which plays a leading role in the overall situation. Article 95 is divided into three paragraphs, of which paragraph 1 and paragraph 2 are about the litigation of ordinary representatives. The third paragraph is about special representative litigation, which clarifies that "investor protection institutions can participate in litigation as representatives when entrusted by more than 50 investors", establishes the special rules of "tacit participation and express withdrawal" of investors, and is also praised by academic circles and public opinion as the beginning of "China version of securities class action lawsuit".
"Several Provisions" is a judicial interpretation tailored for securities dispute litigation in the Supreme People's Court according to the civil procedure law, securities law and other laws, combined with the actual situation of the capital market and court trial practice. There are 42 articles in Several Provisions, which make detailed provisions on the jurisdiction, filing conditions, rights registration, litigation development, mediation and reconciliation, execution and distribution of ordinary representative litigation and special representative litigation. As some scholars have said: "Some provisions refine the provisions of Article 95 of the new securities law in terms of procedural rules, realize the system connection between the new securities law and the civil procedure law, and really activate the China version of the securities class action lawsuit." In addition, on July 3, 20201day, the CSRC issued the Notice on Doing a Good Job of Investor Protection Agencies Participating in the Litigation of Special Representatives of Securities Disputes. These * * * isomorphs have become different levels of securities dispute representative litigation norms, formally established the institutional framework of China's securities dispute representative litigation, and enhanced the operability of the rules.
Litigation types of securities dispute representatives
"Representative litigation of securities disputes includes ordinary representative litigation and special representative litigation caused by false statements, insider trading and market manipulation in the securities market." Among them, the two are consistent in some applicable rules. For example, if there is no special provision for special representative litigation in several articles, the relevant provisions of representative litigation in ordinary representative litigation can be applied. As for the differences between them, they are mainly shown in the following table:
Practice and Value of Representative Litigation in Securities Disputes
Specific and clear institutional rules can guide practice and have a positive incentive effect on practice. According to media reports, "On August 8, 2020 18, the Shanghai Financial Court accepted several disputes over the liability for securities misrepresentation among investors who applied for ordinary representative litigation. This case is the first case in which a party has applied for an ordinary representative lawsuit since the promulgation of Several Provisions. " It can be seen that the open, inclusive and advancing with the times system rules have obvious incentive effect on practice. The lawsuit of securities dispute representative has set sail. I believe that in the near future, special representative litigation will also emerge in practice, which is of great benefit to the long-term stability and prosperity of the capital market order and the protection of investors' legitimate rights and interests.
The biggest highlight of representative litigation in securities disputes is special representative litigation. Special representative litigation has the following unique values: First, it is conducive to reducing litigation costs and efficiently safeguarding the legitimate rights and interests of investors. The application of the special procedural rules of "tacit participation and explicit withdrawal" to the litigation of special representatives is conducive to overcoming the obstacles encountered in routine litigation and protecting the legitimate rights and interests of investors to a greater extent. Moreover, "the special representative does not pay the case acceptance fee in advance", and the plaintiff who lost or partially lost the case can apply for the reduction of legal fees, which is conducive to reducing litigation costs and encouraging more investors to join the team to safeguard their legitimate rights and interests. Secondly, the special representative's specific litigation is professional, which can guarantee the fairness of litigation and effectively protect the legitimate rights and interests of investors. The special representative's lawsuit is represented by the investor protection agency, and China's investor protection agency, as a public welfare organization aiming at protecting the legitimate rights and interests of investors, has a high degree of professionalism and rich litigation practice experience, which ensures the professionalism of the special representative's lawsuit. On the practical level, as a professional investor protection institution, CSI Small and Medium Investor Service Center issued the Litigation Business Rules for Special Representatives of CSI Small and Medium Investor Service Center (Trial). Combining the past practice and the existing specific rules, we can ensure the fairness of litigation to the maximum extent and realize the protection of investors' legitimate rights and interests.