Provisions of the Supreme People's Court on Several Issues Concerning Representative Litigation in Securities Disputes

This document is included in the Compilation of Judicial Interpretations of the Civil Code and Local Judicial Documents; click the link to view details of the compilation. Provisions of the Supreme People's Court on Several Issues Concerning Representative Litigation in Securities Disputes Judicial Interpretation [2020] No. 5 The Provisions of the Supreme People's Court on Several Issues Concerning Representative Litigation in Securities Disputes were adopted at the 1,808th meeting of the Adjudication Committee of the Supreme People's Court on July 23, 2020, and are hereby promulgated, effective as of July 31, 2020. Supreme People's Court July 30, 2020 Provisions of the Supreme People's Court on Several Issues Concerning Representative Litigation in Securities Disputes (Adopted at the 1,808th meeting of the Adjudication Committee of the Supreme People's Court on July 23, 2020; effective as of July 31, 2020) To further improve the securities class action system, facilitate investors in initiating and participating in litigation, reduce investors’ rights-protection costs, protect investors’ lawful rights and interests, effectively punish violations of laws and regulations in the capital market, and safeguard the sound and stable development of the capital market, these Provisions are formulated in accordance with the Civil Procedure Law of the People’s Republic of China, the Securities Law of the People’s Republic of China, and other relevant laws, taking into account actual conditions in the securities market and judicial practice. I. General Provisions Article 1: The representative litigation in securities disputes referred to in these Provisions includes ordinary representative litigation and special representative litigation arising from conduct such as false statements, insider trading, and market manipulation in the securities market. Ordinary representative litigation refers to litigation instituted pursuant to Articles 53 and 54 of the Civil Procedure Law and Paragraphs 1 and 2 of Article 95 of the Securities Law; special representative litigation refers to litigation instituted pursuant to Paragraph 3 of Article 95 of the Securities Law. Article 2: Cases concerning representative litigation in securities disputes shall be under the jurisdiction of intermediate people’s courts or specialized people’s courts located in municipalities where provincial, autonomous regional, or centrally administered municipal governments are situated; in sub-provincial cities; or in special economic zones. For actions brought against multiple defendants, jurisdiction lies with the intermediate people’s court or specialized people’s court having jurisdiction in the domicile of the issuer; for actions brought against parties other than the issuer, jurisdiction lies with the intermediate people’s court or specialized people’s court having jurisdiction in the domicile of the defendant. For special representative litigation cases, jurisdiction lies with the intermediate people’s court or specialized people’s court located in the city where the securities exchange or other national securities trading venue approved by the State Council—on which the disputed securities are centrally traded—is situated. Article 3: People’s courts shall fully leverage the functions of diversified dispute resolution mechanisms, guiding and encouraging parties, on a voluntary and lawful basis, to resolve securities disputes through non-litigious means such as administrative mediation, industry mediation, and professional mediation. Where parties choose to resolve disputes through litigation, people’s courts shall promptly register the case. Emphasis shall be placed on mediation during trial proceedings. Article 4: In adjudicating representative litigation cases in securities disputes, people’s courts shall rely on information technology to carry out case registration, service of litigation documents, public announcements and notifications, registration of rights, distribution of enforcement proceeds, and other tasks—thereby facilitating parties’ exercise of litigation rights and performance of litigation obligations, and enhancing fairness, efficiency, and transparency in adjudication and enforcement. II. Ordinary Representative Litigation Article 5: Where the following conditions are met, people’s courts shall apply the ordinary representative litigation procedure: (1) The plaintiffs number ten or more, and the complaint satisfies the requirements stipulated in Article 119 of the Civil Procedure Law and the conditions for joint litigation;

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