Research On The Initiating Procedure Of Securities Special Representative Action

In the past ten years,due to the imperfection of the litigation mechanism,it has been difficult for investors to break through the dilemma of "collective behavior" and the high cost of rights protection,making investors dare not easily file securities civil lawsuits.The new round of revision of China’s Securities Law has brought new opportunities for the improvement of the investor protection system in China’s securities market.Among them,the reform of the special representative litigation mechanism not only greatly reduces the litigation procedures,but also effectively protects the legitimate rights and interests of investors,which is undoubtedly a major breakthrough in China’s judicial system.Under the special commercial legal system,represented by investor rights protection institutions,the system has innovated class action lawsuits in its unique way.The Provisions on Several Issues Concerning Representative Litigation in Securities Disputes was promulgated by the Supreme People’s Court in July 2020,and the Submission Center has further refined the corresponding procedures in accordance with the Provisions,which are more detailed and reflect the characteristics of public welfare.The service center acting as the special representative and giving him the right to choose cases has fully played an exemplary and deterrent effect,and is a useful application for ordinary representatives at the level of resolving securities dispute litigation.However,since the system is still in the initial stage and rarely involves judicial judgment in actual operation,there are still many procedural and substantive problems to be solved,and we should learn from the relevant systems and cases inside and outside the region,and combine China’s national conditions to select Kangmei Pharmaceutical,which is the first case of special representative litigation,to study the initiation procedure of securities special representative litigation.The latest practical experience of Kangmei Pharmaceutical shows that there are disputes in the initiation procedure of special representative litigation,such as the connection between ordinary representative litigation and special representative litigation,case selection criteria,and determination of the scope of special representative litigation rights holders.In view of this,only through the joint efforts of various institutions and organizations can the securities dispute resolution mechanism with Chinese characteristics be effectively implemented and the healthy development of China’s capital market can be better promoted.This article is divided into four main parts:The first part mainly expounds the causes of the difficulty of civil compensation litigation for securities infringement in China and explores a new civil litigation system for securities infringement.Through the analysis of the causes of securities civil remedies dilemmas,it mainly includes legislative defects,high costs of investor litigation and rights protection,the intrinsic nature of securities mass disputes,and the influence of court and judge factors.At the same time,by analyzing the limitations of individual litigation,joint litigation and representative litigation,it is necessary to explore new forms of class action,and draw on foreign securities civil relief systems to explain the rationality of establishing special institutions for investor protection to represent the rights and interests of investors.The second part mainly explains the history,legal provisions and practical application of the securities special representative litigation system.A series of laws and regulations have clearly stipulated the specific rules and conditions for the application of special representative litigation,which has been further developed in practice.The application of the special representative litigation system in practice is introduced,and the important research significance of the Kangmei Pharmaceutical case in the civil compensation case of misrepresentation of listed companies is emphasized.The third part focuses on the difficulties faced by the current Special Representative initiation proceedings.Through the analysis of legal provisions and the sorting out of cases,three major issues are raised: the connection between ordinary representative litigation and special representative litigation,the ambiguity of typical case selection criteria of investor protection institutions,and the definition of the scope of rights holders in special representative litigation.Each problem is divided into several small points for elaboration and layer-by-layer analysis.The fourth part is to propose ways to resolve issues related to the commencement of proceedings by the Special Representative.In view of the above problems,the first suggestion is to authorize the insured institution to directly initiate a special representative lawsuit,learn from the experience of Taiwan,and directly stipulate that the service center can directly file a lawsuit in its own name;The second is to encourage insured institutions to strengthen supervision by formulating a fee system for insured institutions and introducing a competition mechanism;The third is to reasonably define the scope of right holders,one way is to model the judgment mechanism in parallel in representative litigation;Another way is to broaden the scope of right holders as much as possible and solve the problem of acts of courts that determine the scope of right holders without hearing.