On July 31, 2020, the Supreme People’s Court issued the Provisions on Several Issues Relating to the Representative Action on Securities Disputes, which marked the formal establishment of the Chinese version of the securities class action system. On August 5, 2020, Professor Liao Fan, a research fellow at CASS Institute of International Law and the Deputy Director General of the CASS Bureau of International Cooperation, was interviewed by the China Global TV Network (CGTN) program “China 24” on the establishment of this new system.

In the interview, Professor Liao believed that the securities class action system on the one hand makes it easier for investors to take legal action against capital market crimes by lowering their litigation threshold and reducing their rights protection cost and, on the other hand,raises cost of violation of law and increases the deterrence of the law through the compensation aggregation effect. He pointed out that, against the background of the transition of the securities issuance system from an approval system to a registration system, interim and ex-post regulation become more important. Regulatory departments and people’s courts must accurately and effectively implement and apply securities laws and administrative regulations and ensure that violators are brought to justice, so as to improve the quality of the capital market and enhance the confidence of investors in China.