CHINA Law and Practice Contributed by: Siyuan Liu, Wei Wang and Huanhuan Yu, Jingtian & Gongcheng
Model judgment mechanism A final judgment in the model case binds only the par- ties to that case, but its common factual findings and legal interpretations serve as important references in parallel cases. Ordinary representative action In actions with a certain number of plaintiffs, the final judgment binds all right-holders. In actions with an uncertain number of plaintiffs, the judgment binds all registered right-holders; non-registered right-holders who later bring separate actions within the statutory limitation period may directly apply the effective judg- ment. Special representative action The final judgment binds all right-holders within the defined scope who have not opted out. Enforcement of Judgments In all of the above mechanisms, entitled parties of the judgment may apply for compulsory enforcement against non-performing parties after the expiry of the performing period prescribed by the court. In repre- sentative actions, some courts permit representatives to apply for enforcement directly on behalf of all plain- tiffs. Enhanced Co-Ordination of Civil, Administrative Regulatory and Criminal Proceedings in Securities Collective Actions On 15 May 2025, the SPC and the CSRC jointly issued the Notice of the Guiding Opinions on Strict and Impar- tial Law Enforcement and Administration of Justice to Serve and Guarantee the High-Quality Development of the Capital Market. This document underscores the comprehensive integration of criminal prosecution, civil litigation, and administrative regulatory enforce- ment in securities enforcement, thereby strengthening the three-dimensional accountability regime across administrative, civil and criminal domains. 4. Legislative Reform 4.1 Policy Development
Diversified Dispute Resolution Development The implementation and refinement of diversified dispute resolution (DDR) mechanisms, particularly through non-litigation mechanisms, was reaffirmed as a policy trend by the government in 2025. In finan- cial consumer disputes in particular, including mass claims arising out of funds, trusts, asset management, and wealth management products, courts across Chi- na are actively exploring specialised mediation, settle- ment and preliminary judgments to enhance judicial efficiency and reduce litigation costs for investors. Institutionalising Representative Actions in Securities Collective Litigation The document jointly issued by the SPC and the CSRC on 15 May 2025 also reaffirmed the policy objective of institutionalising representative actions under Article 95 of the Securities Law. To date, four cases have applied the special representative action mechanism, while dozens of cases have been conducted under the ordinary representative action mechanism. 4.2 Legislative Reform Prospective Issuance of Judicial Interpretation of Insider Trading and Market Manipulation On 4 April 2024, the State Council issued Several Opinions on Strengthening Regulation, Preventing Risks and Promoting the High-Quality Development of the Capital Market (“Opinions on High-Quality Devel- opment of the Capital Market”), urging the promulga- tion of judicial interpretations addressing civil com- pensation for insider trading and market manipulation. This initiative was reiterated in the Notice of the Guid- ing Opinions on Strict and Impartial Law Enforcement and Administration of Justice to Serve and Guarantee the High-Quality Development of the Capital Market, jointly issued by the SPC and the CSRC on 15 May 2025. The judicial interpretation has now been for- mally included in the legislative agenda, and its draft- ing and application are expected to trigger extensive discussion in the market. Prospective Issuance of Financial Trial Work Conference Minutes In 2023, the SPC prepared a draft Minutes of Finan- cial Trial Work Conference and circulated it for public comment. However, no final version has been formally promulgated as yet. This document may be issued
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