Xinhua News Agency, Beijing, March 12. China Securities Journal published an article on the 12th, “The China Securities Regulatory Commission and the Ministry of Finance plan to stipulate that the property of securities lawbreakers will be given priority to bear civil liability for compensation.” According to the article, the China Securities Regulatory Commission reported on March 11 that the China Securities Regulatory Commission and the Ministry of Finance jointly researched and drafted the “Regulations on Matters Concerning the Preferential Use of the Property of Persons Who Have Violated Securities Acts to Bear Civil Compensation Liability (Draft)”, and publicly solicited opinions from the public. The “Regulations” clarify the specific working mechanism for the administrative fines and confiscations paid by the offenders to be used for civil compensation liability.
The CSRC stated that the “Regulations” are an important measure to implement the people-centered development concept, improve the securities civil compensation system, and provide a more solid legal guarantee for the full implementation of the stock issuance registration system. It is of great practical significance to effectively protect the legitimate rights and interests of investors.
(Photo description) File photo, issued by Xinhua News Agency
There are fourteen articles in the “Regulations”, which mainly stipulate the subject of the application, the acceptance of the application, the time limit for the application, and the amount of the application.
Regarding the subject of the application, the “Regulations” make it clear that a person who violates the provisions of the Securities Law shall be liable for civil compensation and administrative liability for paying fines and confiscations at the same time due to the same illegal act. After filing a lawsuit with the people’s court and obtaining a favorable judgment or a mediation letter, the aggrieved investor who has not received full compensation following being enforced by the people’s court or allocated by the bankruptcy liquidation procedure may file a written application; Investor protection agencies acting as representatives in special representative proceedings may file applications on behalf of aggrieved investors.
Regarding application acceptance, application period, and application amount, the first is to clarify the application materials required by the victimized investor to file an application, as well as the supplementary and correction requirements for relevant application materials. The second is to clarify that the aggrieved investor can file an application within one year following the people’s court issues a ruling on the termination of execution; if the offender is declared bankrupt by the people’s court, it shall file an application within one year following the end of the bankruptcy procedure or the end of the additional distribution procedure; , the CSRC will not accept it. The third is to clarify that the amount applied by the injured investor shall not exceed the amount of compensation that the defendant should bear as specified in the civil judgment, etc., and no further application shall be made for the part that the defendant has already performed; If multiple aggrieved investors submit applications at the same time, and the total amount of the applications exceeds the amount of fines and confiscations actually paid by the offender, the amount will be refunded according to the proportion of the application amount determined by the “Regulations”.
“The “Regulations” are the detailed implementation of the relevant laws, and have more practical significance following the revision of the Securities Law.” Xu Feng, a lawyer at Shanghai Jiucheng Law Firm, said that following the implementation of the new Securities Law, the amount of administrative violation fines has been greatly increased. However, the solvency of the subject of the claim, such as the listed company corresponding to this type of behavior, is poor. The CSRC formulates this detailed regulation in accordance with the law, which is of great practical significance for giving priority to protecting the interests of small and medium investors.
In terms of continued payment and collection following withdrawal from the treasury, if the fines and confiscations paid by the offender are used to undertake civil compensation liability, the actual effect is that the administrative responsibility determined in the relevant administrative penalty decision has not been implemented. Fines and confiscations will not be conducive to the deterrent effect of administrative accountability, and will also damage national interests. Therefore, the “Regulations” specify that if the fines and confiscations are used to undertake civil compensation liabilities, the offenders should continue to perform their obligations to pay the relevant fines and confiscations, and the CSRC should continue to perform their collection duties.
Song Yixin, a lawyer from Shanghai Hanlian Law Firm, believes that the “Regulations” allow investors to obtain tangible economic benefits by withdrawing from the treasury when certain conditions are met, which is an important measure to improve investors’ sense of gain. The “Regulations” will also improve the securities civil compensation system and provide a more solid legal guarantee for the full implementation of the stock issuance registration system. (over)Return to Sohu, see more
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