Research On The System Of Special Representative Action For Securities Disputes In China

The new China Securities Law,which came into force on March 1,2020,provides in Article 95(3)that China’s investor protection agencies may file special representative actions,which is a historic progress in China’s securities law and a milestone on the road to protecting the rights of small and medium-sized investors in China.China’s securities dispute special representative litigation system is derived from the representative litigation of China’s civil procedure law,and combined with the U.S.-style withdrawal system group litigation and Chinese Taiwan-style litigation model with government background non-profit organizations as representatives,and has a strong and advanced.China’s investor protection agency-led special representative litigation system has obvious advantages.First,it can effectively concentrate the power of small and medium-sized investors to combat securities violations;second,the investor protection agency can take advantage of institutional and legal support to maximize the protection of investors’ rights and interests;third,it can also avoid the profit-seeking and abusive litigation of lawyers.However,China’s special representative litigation system has just started,is still young,there are still many problems,such as the pre-procedural constraints have not been completely lifted,the status of the investor protection agency is not clear,its impartiality and independence to be optimized,the reasonableness of its monopoly of representation is still subject to debate,supporting incentives and supervision mechanisms are still to be clarified.By examining the securities group litigation system in the United States and Chinese Taiwan,the author has distilled three insights for China’s special representative litigation system.First,lawyer-led securities group litigation is likely to lead to abusive problems,they need to take its essence and remove its dross;second,join the system group litigation,administrative-led group litigation are likely to affect the efficiency of rights.Finally,I put forward five suggestions for the special representative system for securities disputes in China.First,further clarify the litigation status and authority of investor protection agencies;second,set up a perfect case selection mechanism,while increasing financial investment;third,fully mobilize the enthusiasm of investor protection agencies;fourth,appropriately set up an incentive mechanism to encourage lawyers to participate in litigation;fifth,further improve transparency and perfect the diversified dispute resolution mechanism.