China has launched a new class action mechanism to crack down on corporate malfeasance in the securities market. Although legal actions by individual investors were possible previously, this was often difficult and costly. Under the new mechanism, the China Securities Investor Services Centre, a Chinese government-affiliated body, can sue on behalf of no fewer than 50 investors in a company, on an opt-in basis. The finding by a court or a regulator that a company has broken the rules or an admission by the company of wrongdoing is a prerequisite for the commencing of a class action.

For more information, see Xinhua article in English and Supreme People’s Court announcement – in Chinese only.   

Author

Simon Hui leads the Firm's Investigations, Compliance & Ethics and Dispute Resolution team in Shanghai. With more than 25 years of practice experience, he has in-depth experience in handling dispute resolution as well as compliance/regulatory matters including anti-bribery/anti-corruption, unfair competition and supply chain management related risks and issues. Simon is a skilled investigator and has conducted complex internal investigations for a large number of multinational companies across a range of industries. He also has experience in dealing with PRC judiciary bodies and regulators such as SPC, SAIC and SAFE. He assists various multinational companies with conducting due diligence, risk assessment and compliance system structuring, and provides training to their management and business teams on anti-corruption, anti-bribery and cybersecurity related issues. From 2016 to 2023, Simon was recognized as the "Tier 1 Leading Individual" in the field of Regulatory & Compliance and Dispute Resolution in China by Legal 500 for eight consecutive years. In 2022 and 2023, Simon earned the recognition of the "Leading Individual" in Corporation Investigations/Anti-Corruption by Chambers Greater China. In 2022, He was awarded "Regulatory & Compliance Lawyer of the Year" by China Law & Practice (CLP) and "A-List: China's Elite Lawyers" by China Business Law Journal (CBLJ). Simon is also an arbitrator of the Shanghai Arbitration Commission and an arbitrator of the Shenzhen Court of International Arbitration (formerly known as the "South China International Economic and Trade Arbitration Commission" the "Guangdong-Hong Kong-Macau Greater Bay Area International Arbitration Center" and the "Shenzhen Arbitration Commission"). Simon's practice focuses on commercial and insurance litigation, international arbitration, and regulatory and compliance.