Supreme People's Court, Questions Concerning the Acceptance of Civil Tort Dispute Cases Arising from False Representation in the Securities Market Circular

Issued: January 15 2002
Effective: as of date of issue
Applicability: A "civil tort dispute case arising from false representation" means a case of civil tort claim brought to the court by an investor whose legitimate rights and interests are injured by false representation in the information disclosure documents provided or published by the information disclosing party to the securities market (Section One).

Main contents: According to the Circular, the people's court will accept a civil tort dispute case arising from false representation only if the case is based on the results of an investigation by the China Securities Regulatory Commission (CSRC) on the alleged false representation (Section Two). Limitation of action for such a claim is two years, running from the date when a punishment decision is made by the CSRC on the false representation act (Section Three). Such claims can be accepted as single or joint actions but it is not appropriate for the court to accept them as class actions (Section Four). The court of first instance for such cases is an intermediate people's court of the municipality directly under the central government or, with independent development plans, the provincial capital or the special economic zone where the defendant resides (Section Five). If a case is accepted, the court shall report its handling of the case to the Supreme People's Court within three days (Section Six).
Related legislation: PRC, Securities Law (Amended), Oct 27 2005, CLP 2006 No.1 p31 and PRC Civil Procedure Law (2nd Revision)