The recent stock market volatility has drawn listed companies’ attention to securities disputes as a possible solution, with regulators recognizing Shenzhen’s innovative dispute practice.
Liu Xiaochun and Zhou Yi share Shenzhen’s experience
Soon after Shenzhen Securities and Futures Dispute Resolution Centre (SFDRC) was established, China Securities Regulatory Commission (CSRC) chairman Xiao Gang sent out a notice for members’ attention – the SFDRC was a development to follow. Xiao noted during a later visit to SFDRC that its four-tiered resolution model, integrating professional mediation, commercial arbitration, professional self-discipline and administrative regulation, was important for settling capital market disputes.
Most securities disputes between listed corporations and investors are settled via litigation. Relying solely on litigation for dispute resolution is not necessarily the ideal choice for listed companies, however. The cases are procedurally complex and require considerable money, time, manpower and material resources. In addition, confidentiality is not protected as the trial proceedings and results are public, which can influence the reputation and image of the listed company.
Dr Liu Xiaochun is president of Shenzhen Court of International Arbitration and vice chairman of Shenzhen Securities and Futures Dispute Resolution Centre. Zhou Yi is a senior case manager of SCIA and the assistant of SFDRC’s secretary-general