Research On The System Perfection Of Securities Group Litigation By Investor Protection Organizations

The new "Securities Law" will come into effect on March 1,2020.Article 95 stipulates that China’s investor protection institutions(hereinafter referred to as "insurance institutions")can file special representative litigation,also known as China’s version of securities class action,which shows that China’s small and medium-sized investors’ rights protection will be more convenient.As a new system,it remains to be seen whether insurance institutions can play a leading role in promoting the operation of securities class action system in the future.Some studies have pointed out that there is a "dilemma of collective action" in securities civil compensation litigation,that is,small and medium-sized investors are not willing to bring a lawsuit because of the high litigation cost and the difficulty of providing evidence.In order to solve this problem,extraterritorial countries and regions adopt market incentive mechanism to encourage lawyers to initiate lawsuits,or select public welfare organizations to file lawsuits on behalf of investors,or use administrative intervention to promote the process of securities civil litigation.As a result,under different litigation cultural background,financial market and incentive mechanism,a securities class action system with a large number of plaintiffs and dominated by different subjects is formed.According to the different leaders,the leading mode of securities class action can be divided into lawyer leading mode,non-profit organization leading mode and securities regulatory department leading mode.From the perspective of comparative law,this paper examines the legislation and practice of other countries and regions,and finds that the lawyer led securities class action model,represented by the United States,has some problems,such as excessive litigation,no prosecution by small companies,and unable to deter securities violations.However,under the reward system,lawyers take the initiative to discover securities market violations,and provide rights protection path for investors with their professionalism,It is an important reason to promote the progress of the U.S.securities market;the securities class action mode led by non-profit organizations,represented by Taiwan region of China,has obvious effect in safeguarding public interests and deterring securities violations,but non-profit organizations have some problems,such as independence,limited funds and insufficient ability;The mode of securities class action led by the securities regulatory authorities in Hong Kong relies on the professional litigation team and rich case handling experience of Hong Kong Securities Regulatory Commission,but this scheme is not suitable for Chinese mainland.To a large extent,the mode of securities class action initiated by investor protection institutions in China draws lessons from the system practice of Taiwan.Insurance institutions are established in accordance with laws,administrative regulations or the provisions of the securities regulatory authority under the State Council,and have the function of public welfare.Since its establishment,it has actively explored and summarized experience in securities support litigation,model litigation and securities civil compensation cases.Therefore,it can be used as a non-profit organization to lead China’s securities class action.However,as a new system in our country,the insurance institutions bring securities class action,even with the experience of Taiwan as a reference,is still in its infancy.There are some problems,such as the unclear positioning of the leading role of the insurance institutions,the conservative design of the relevant system and so on.The specific performance is that the prepositional procedure hinders the start of the litigation of the insurance institution,the setting of the litigation procedure dispels the role of the insurance institution,the lack of internal incentive mechanism,the provisions of case selection or the imbalance of litigation,which makes the insurance institution unable to effectively lead the securities class action.In order to give full play to the leading role of insurance institutions,make China’s securities class action real,and better safeguard the rights and interests of small and medium-sized investors,this paper makes a comparative study of the leading modes of securities class action in other countries and regions,and puts forward some suggestions for improving the leading mode of securities class action in China,It includes canceling the provisions of pre procedure,expanding the rights of insurance institutions in litigation procedures,guiding lawyers to participate in securities class action,clarifying fair and transparent case selection criteria,and promoting the construction of long-term mechanism of insurance institutions,so as to better implement the system of insurance institutions leading securities class action in China and make the system of securities civil compensation truly implemented,implemented,Comprehensively improve the level of investor protection in China.