Guangdong Province has the largest number of securities and futures investors in the country. According to statistics, as of March 31, 2015, the jurisdiction—excluding Shenzhen—was home to more than 16.6 million investors, accounting for 9% of the national total. In recent years, as securities and futures trading has become increasingly active, related transaction disputes have also risen. To address investor grievances in a timely and appropriate manner, the regulatory authorities and self-regulatory organizations within the jurisdiction have made mediation a key tool for resolving disputes, progressively refining the mediation mechanism, strengthening the mediation workforce, and advancing the professionalization of mediation efforts.

In March 2013, under the guidance of the Guangdong Securities Regulatory Bureau, the Guangdong Securities and Futures Association (hereinafter referred to as the Guangdong Securities Association) established the Securities and Futures Dispute Mediation Committee and formulated relevant regulations, including the Measures for the Administration of Securities and Futures Dispute Mediation, the Mediation Rules, and the Measures for the Administration of Mediators.

The Association categorizes mediation into summary mediation and standard mediation. For securities and futures disputes where the facts are clear and the issues in dispute are minor, Association staff conduct mediation through a simplified procedure, coordinating among market participants via telephone, email, or other means. For more complex disputes, with the consent of both parties, the standard procedure is initiated, under which professional mediators conduct mediation in accordance with prescribed procedures. To strengthen the capacity for professional mediation, the Association has appointed 45 senior professionals from the securities and futures industry, practicing lawyers, and university professors as mediators.

To broaden channels for investors to protect their rights, the Guangdong Securities Association has launched an online complaint and dispute-resolution platform on its official website and established a securities and futures dispute-handling hotline in March 2014. This hotline serves as a dedicated line for receiving investor inquiries and complaints, with designated staff responsible for answering calls, recording details, and providing responses.

The association has also established a complaint-handling and mediation coordination mechanism with the Guangdong Securities Regulatory Bureau, taking charge of handling securities and futures dispute complaints referred by the Bureau and the 12386 hotline. In addition, it has jointly signed a memorandum of understanding on litigation-mediation coordination with the Guangdong Securities Regulatory Bureau and the Guangzhou Intermediate People’s Court, making arrangements for matters such as judicial confirmation of mediation agreements to ensure their effective enforcement.

Compared with arbitration and litigation, industry mediation offers several advantages, including a streamlined and efficient procedure, speed and flexibility, high levels of professional expertise, and lower costs. For instance, in disputes over the transfer of custody of securities accounts, upon receiving a complaint call from an investor, the Guangdong Securities Association promptly contacts the party being complained against and urges it to process the matter expeditiously in accordance with applicable regulations. As a result, the party being complained against typically completes the transfer-of-custody procedure for the investor on the same day, thereby swiftly resolving the investor’s concern.

As the mediation service is provided to investors free of charge, it helps reduce the costs of rights protection and has thus enjoyed widespread popularity since its launch. From January 2014 to April 2015, the association received a total of 496 complaints, of which 436 were successfully resolved through mediation, yielding a success rate of 88% and effectively easing disputes between investors and securities and futures operating institutions. In addition, according to incomplete statistics, in 2014, thanks to the association’s mediation efforts, securities and futures firms within the jurisdiction compensated nearly 60 investors for a total of more than RMB 1 million due to their own negligence and other reasons, thereby effectively mitigating investors’ losses.

Given the highly specialized nature of securities and futures disputes, and in order to establish a professional mediation institution and actively support the China Securities Regulatory Commission’s “Fairness at Your Side” investor protection campaign, the Guangdong Securities Association and the Guangdong Listed Companies Association, drawing on their accumulated experience in mediating securities and futures disputes and under the guidance of the Guangdong Securities Regulatory Bureau, have jointly initiated the establishment of the Guangdong CSRC Investor Services and Dispute Mediation Center (hereinafter referred to as the “Mediation Center”), in collaboration with relevant securities and futures firms within the jurisdiction. The Mediation Center has recently been registered with the Guangdong Provincial Department of Civil Affairs.

At present, the Mediation Center has fully assumed responsibility for dispute mediation previously handled by the Guangdong Securities Association. It is committed to providing flexible and diversified investor services through legal clarification, reasoned analysis, persuasive counseling, and advisory assistance; impartially and fairly mediating securities and futures disputes; safeguarding investors’ legitimate rights and interests; and contributing to the sound development of the capital market within the Guangdong jurisdiction.