Guangdong Securities Regulatory Bureau Promotes the Alignment of Mediation and Litigation Channels for Securities and Futures Disputes within Its Jurisdiction
Release date:2017-09-30
Recently, the Guangdong Securities Regulatory Bureau, the Guangdong Provincial Higher People’s Court, and the Guangdong CSRC Investor Services and Dispute Mediation Center jointly signed the Memorandum of Understanding on Cooperation for the Coordination of Litigation and Mediation in Securities and Futures Disputes.
According to the Memorandum, mediation and litigation may be coordinated in the following ways: First, where an investor has a securities or futures-related dispute with a listed company or a securities and futures business institution within the Guangdong jurisdiction, the investor may directly apply to the Mediation Center for mediation; upon successful mediation, the local people’s court may further confer judicial confirmation on the mediation agreement. Second, if an investor has already filed a lawsuit with the people’s court, or if the case is currently under adjudication by the court, with the consent of both parties, the court may entrust the Mediation Center to conduct preliminary mediation; if mediation fails, the court shall then render a judgment.
According to available information, the Guangdong CSRC Investor Services and Dispute Mediation Center is a public-interest investor service organization established under the guidance of the Guangdong Securities Regulatory Bureau. It was jointly funded by the Guangdong Securities and Futures Industry Association, the Guangdong Listed Companies Association, and several securities and futures firms operating within the Guangdong jurisdiction, and is dedicated to providing investors with services for handling securities and futures complaints, mediating disputes, and offering advisory support.
Since its registration with the Guangdong Provincial Department of Civil Affairs in April of this year, the center has mediated nearly 200 securities and futures trading disputes, recovering more than RMB 300,000 in losses for investors. At present, the mediation center is staffed with 45 professional mediators; following the signing of the memorandum, it plans to recruit an additional six mediators who are well-versed in the legal aspects of listed-company matters, thereby laying the groundwork for future mediation of cases involving false statements by listed companies.
Relevant data indicate that the Guangdong court system is severely burdened by a significant caseload relative to its staffing. According to the 2014 Work Report of the Guangdong Higher People’s Court, in 2014 alone the province’s courts accepted and adjudicated more than one million cases, with each judge concluding roughly twice as many cases as the national average, underscoring the persistent imbalance between caseloads and judicial resources. In particular, civil compensation cases involving false statements by listed companies—characterized by numerous plaintiffs, substantial amounts in dispute, and extensive teams of counsel—place considerable pressure on the courts handling such matters. Consequently, the relevant courts have called for the introduction of a pre-litigation mediation mechanism to help分流the caseload and alleviate the burden on the judiciary. It is against this backdrop that the mediation–litigation coordination mechanism for securities and futures disputes within the Guangdong jurisdiction was established.
A relevant official from the Guangdong Securities Regulatory Bureau stated that the signing of the Memorandum of Understanding on the Coordination between Litigation and Mediation for Securities and Futures Disputes between the Joint Mediation Center and the Provincial People’s Court represents both a milestone achievement in the Bureau’s long-term, vigorous efforts to protect investors and an important step in implementing the China Securities Regulatory Commission’s “Fairness Within Reach” special campaign. The Guangdong Securities Regulatory Bureau will further strengthen its business guidance to the Mediation Center, leverage the litigation–mediation coordination platform, and fully harness the respective strengths of regulatory authorities, industry mediation organizations, and people’s courts, thereby providing smoother and more convenient channels for handling securities and futures disputes within its jurisdiction.
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