Beijing Financial Court shows it's determined to protect investors' rights

Nearly half the cases heard by the Beijing Financial Court over the past two years were related to the protection of investors, which demonstrates the determination and efforts made by the city's judicial authorities to safeguard national financial security.

Data released by the court showed on Monday that from its establishment on March 18, 2021, to March 31 of this year, it heard a total of 16,289 disputes, 7,651 of which were related investor protection involving stocks, funds and financial products.

Since the court was set up, judges have intensified efforts to solve cases concerning investors efficiently, as the judges better understand that protecting the legitimate rights and interests of the investors are important to build a standardized, transparent, dynamic and resilient capital market as well as to create a sound business environment and promote healthy economic development, Li Yanhong, vice-president of the court, told a news conference on Monday.

A large number of the investor-related lawsuits were initiated by small and mid-level securities investors, claiming that defendants such as sponsors, listed companies and securities underwriters incorrectly or improperly disclosed or introduced information during the issuance or trading of securities, she said, adding that the number of investors initiating such lawsuits continues to rise.

As financial consumers and investors play a major role in the financial market, the protection of their rights and interests are not only related to their investment confidence, but also to national financial security, Li noted.

She confirmed that the rights and interests of financial consumers, especially small and mid-level investors, are vulnerable to infringement due to serious information asymmetry and their limited capital.

"Therefore, financial institutes should meet their obligations, which means they need to promote or sell high-risk products or services to consumers in line with their investment capabilities," she explained, adding that a number of disputes were caused by the poor performances of the institutes.

To improve the quality of such case handling, the court has invited a group of experts in finance and law to serve as its think tank, and it also worked with several academies and colleges to research related issues, Li said.

In addition, the court has also raised awareness of such problems by providing free legal services to investors.

"For example, our online videos on pension insurance and trust investment has been viewed about 2.2 million times," the vice-president said. "Also, a team we organized has visited communities, enterprises and schools more than 50 times to voluntarily introduce financial laws and rules."

The court, which specializes in tackling finance-related cases, was set up to help the country strengthen financial supervision, boost financial reform, prevent financial risks, improve the handling of monetary disputes and increase the Chinese judiciary's international influence.

The Beijing Financial Court was the second financial court established in China. The first opened in Shanghai in 2018.