Diversified False Statements Dispute Resolution Under Chinese Securities Law

Abstract

In 2019, the People's Republic of China (the "PRC") amended its Securities Law and adopted the normal representative and special representative action mechanism in the multi-party securities fraud case. For a long time, some courts have adopted a typical case - parallel case mechanism according to Notice on Carrying out the Pilot Program of Diversified Dispute Resolution Mechanism for Securities and Futures in Certain Areas ("the Diversified Dispute Resolution Notice") published by the Supreme Court of the People's Republic of China (the "Supreme Court") and the China Securities Regulatory Commission (the "CSRC"). The representative action mechanism and the model case-parallel case mechanism constitute the diversified securities fraud dispute resolution mechanism with traditional dispute resolutions, such as cases consolidation and judicial mediation. This article will explain the different resolution mechanisms, analyze some leading cases, and help readers understand the practice trend in securities false statements civil cases.