Supreme People's Court (SPC) and Securities Regulatory Commission are researching pilots on class action lawsuits in ruling civil cases related to financial securities. Shan Suhua 单素华 Shanghai Intermediate Court assistant judge commented on the background of these cases, noting
- shareholder rights litigation is an important way to combat illegal activity in securities trading and protect investors’ rights
- the rapid increase of lawsuits pertaining to investors' rights over recent years have placed a heavy burden on the civil law system
- starting in 2006, China Securities Investor Services Centre (ISC), an NGO under the supervision of the Securities Regulatory Commission, has spearheaded acting on behalf of investors to conduct class action lawsuits to protect investors’ rights
- ISC acts on behalf of a large number of small investors dispersed throughout different regions in China, which eases the burden on SPC
- ISC also contributes valuable expertise due to its in-depth knowledge of financial securities
This is a positive development, and strengthens the rule of law in China's financial securities market.