| China’s civil compensation litigation for securities misrepresentation has gone through three stages of temporary inadmissibility-conditional acceptance-fully open acceptance.The temporary inadmissibility stage was marked by the Notice of the Supreme People ’s Court on Refusing to Accept Civil Compensation Cases Involving Securities for the Time Being issued by the Supreme People’s Court on 21st September 2001(hereinafter referred to as the "2001 Notice"),due to which China’s securities misrepresentation civil compensation litigation fell into a state of silence.The conditional acceptance stage was marked by the pre-claim procedure for civil compensation litigation for securities misrepresentation(hereinafter referred to as the"pre-claim procedure"),whereby investors who have suffered losses as a result of securities misrepresentation shall take an administrative penalty decision or a criminal litigation ruling in force as a necessary prerequisite for filing a civil claim for compensation in the People’s Court.On 15th January 2002,the Supreme People’s Court promulgated the Notice of the Supreme People’s Court on the Relevant Issues concerning the Acceptance of Cases of Disputes over Civil Tort Arising from False Statement in the Securities Market(hereinafter referred to as the"2002 Notice"),which first set up the pre-claim procedure.On 9th January 2003,the Supreme People’s Court issued the Several Provisions of the Supreme People’s Court on Trying Cases of Civil Compensation Arising from False Statement in Securities Market(hereinafter referred to as the "2003 Provisions"),expanding the scope of the pre-claim procedure,and thus the preclaim procedure took formal shape and began its 20-year-long reign.The stage of full open acceptance was marked by the Several Provisions of the Supreme People’ Court on the Trial of Civil Cases for Damages for the Tort ofMisrepresentation in the Securities Market(hereinafter referred to as the "2022 Provisions")issued by the Supreme People’s Court on 21st January 2022,which was the first time for the Supreme People’s Court to amend the 2003 Provisions after 20 years.China’s civil compensation litigation for securities misrepresentation has,after more than ten years of development,accumulated relatively sufficient experience both theoretically and practically,and China finally entered the new era of civil compensation litigation for misrepresentation.The 2022 Provisions abolished the pre-claim procedure and the civil compensation litigation is no longer premised on the administrative penalties by administrative organs or criminal rulings by courts.The abolition of the pre-claim procedure is a milestone in the history of the civil compensation litigation for securities misrepresentation in China,marking the trust of China’s legislation in judicial remedies and the unbundling of investors’ rights of action.This article focuses on responding to the new situation and new issues arising from the abolition of the pre-claim procedure,hoping to provide theoretical supply and standardized regulation for the civil compensation litigation for securities misrepresentation in the new era.The first chapter attempts to establish normative standards for the determination of securities misrepresentation acts from the premise of the abolition of the pre-claim procedure.When the pre-claim procedure existed,the administrative authorities were responsible for almost all the determinations of securities misrepresentation acts.The courts became overly reliant on the administrative authorities and neglected the theoretical argumentation for the determination of securities misrepresentation acts.With the abolition of the pre-claim procedure,the courts have to deal with the determination of securities misrepresentation acts independently.This chapter reconstructs the criteria for the determination of securities misrepresentation acts from two perspectives of illegality and materiality.Illegality means that the misrepresentation act violates laws and regulations relating to information disclosure;materiality means that the misrepresentation act reaches a punishable standard from a quantitative perspective and is sufficient to influence investors’ investment decisions from a qualitative perspective.The second chapter discusses the criteria for determining the date on which a misrepresentation of securities is revealed.The disclosure date of misrepresentation is the date on which the misrepresentation is revealed and the market becomes aware of the truth.Depending on the subject of the revelation,the date of revelation can be divided into the reveal date and the correction date.The significance of the disclosure date is to reveal the existence of misrepresentation to the market,to release warning signals and to remind investors to reexamine the price of securities,so that the price of securities gradually squeezes out the water and returns to their true value.This chapter reshapes the criteria for determining the disclosure date from both formal and substantive aspects.The formal elements require that the disclosure shall be of national impact,initial and known to the market;the substantive elements require that the disclosure shall be specific and relatively certain so that investors can use the disclosure information to trace back to specific disclosure violations,thereby adjusting their investment decisions and driving the price of securities back to their true level.The third chapter demonstrates the mechanism of linking civil liability and administrative liability after the abolition of the pre-claim procedure.Before the abolition of the pre-claim procedure,administrative liability was a prerequisite for the determination of civil liability,which is a manifestation of the concept of "public law weighs heavily than private law" in China’s securities legal liability system.The principle of priority of civil compensation is difficult to be effectively guaranteed due to the difference in efficiency between administrative enforcement and civil enforcement,which affects the realization of the principle of investor protection.After the abolition of the pre-claim procedure,the determination of civil liability and administrative liability has returned to the same starting line.Taking the disposal of misrepresentation as a benchmark,the establishment of a two-way activation mechanism of civil litigation and administrative law enforcement beforehand,a cooperation mechanism of investigation and evidence collection between civil litigation and administrative law enforcement during the process,and a coordination mechanism of execution between civil litigation and administrative law enforcement afterwards,realizing the two-way linkage of civil litigation and administrative law enforcement,is conducive to strengthening the communication and contact between the courts and administrative organs,ensures the realization of the principle of priority of civil compensation,safeguards the rights and interests of investors,and promotes the renewal and development of the securities legal liability system. |
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