On August 20 this year, the Shanghai Financial Court (SFC) celebrated its fifth anniversary since its establishment. On August 21, the SFC held a press conference dedicated to the theme of high-quality development of specialized financial court. Zhao Hong, secretary of the Party Leadership Group and president of the SFC, reported on the court’s work during the five years.
As the first specialized financial court in China, the SFC, over the past five years since its inception, has adhered to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, thoroughly implemented Xi Jinping Thought on the Rule of Law and fully played its exemplary and leading role as the first specialized financial court in China. Based on the function of financial adjudication, the SFC has identified the converging and breakthrough points to safeguard the implementation of the national financial strategy, as well as the development of Shanghai as an international financial center and the development of a law-based business environment. Under the forward-looking plan, the SFC has adopted high speed, high standards, and high quality for building itself into a “specialized, international, and intelligent” world-class financial court. Despite the lack of precedents to follow and mature experiences to draw from, the court has worked hard to overcome arduous struggles and broken new ground with enterprising spirit, offering high-quality financial judicial services to ensure the high-quality development and the high-level reform and opening-up of Shanghai.
Focusing on the establishment of rules, the SFC has been enhancing mechanism innovation, and striving to improve the core competitiveness of financial judiciary
The SFC has made significant achievements over the past five years. To be specific, the SFC has accepted a total of 41,077 financial cases, concluding 39,594 of them. The total amount involved in these cases reached 1,111.227 billion yuan. The total amount of financial cases accepted by the SFC was approximately 2.6 times the size of those accepted by all of Shanghai’s intermediate people’s courts in ten years before the establishment of the SFC. The subject matter of creditors' applications for enforcement amounted to 355.812 billion yuan, accounting for about 25% of the total amount in all courts of Shanghai.
The SFC has set an exemplary benchmark and established Chinese standards. It has handled a series of major, difficult, complex, and novel cases, including China’s first representativ case on mass securities-related dispute, China’s first case applying the principle of “civil compensation liability shall be borne first in case of securities infringement”, and China’s first administrative litigation case resulting from new regulations on delisting. A total of 23 cases were selected for various prestigious lists, such as the Top Ten Cases Promoting the Rule of Law in the New Era, the Top Ten Cases of People’s Courts, and the Top Ten Influential Litigation Cases of China. Through the adjudication of cases with significant regulatory implications, the SFC has defined the legal boundaries for financial transactions, demonstrated the judiciary’s stance on market behaviors, and stabilized the expectations of domestic and foreign financial market entities.
The SFC has innovated specialized mechanisms and created “Shanghai Experience”. Leveraging its advantages of specialized judicial resources and taking into account the characteristics of financial and commercial cases, the court has pioneered over thirty specialized mechanisms for financial adjudication and enforcement work, such as a demonstrative judgment mechanism for securities disputes and a new judicial assistance mechanism of facilitating the disposal of bulk stocks, which have elevated the levels of fairness and efficiency. Achievements like the representative litigation mechanism for securities disputes have been adopted by Interpretation of the Supreme People's Courtt, while the experience of the SFC in trial and enforcement has been promoted nationwide.
The SFC has been actively promoting digital transformation to empower the efficiency and quality of judicial services. The SFC is committed to building a four-sphere digital court system incorporating “Smart Source, Smart Adjudication, Smart Management, and Digital Court”. The SFC has strengthened its digital capabilities, enabling end-to-end online case handling, and facilitating the efficient and successful resolution of major cross-border disputes online. It has also highlighted its financial expertise by creating a warning platform for financial dispute risks and a data assistance platform for financial case adjudication and execution, providing real-time application references for financial risk prevention. The court has also bolstered guarantees under the big data strategy by establishing a whole-process digital supervision system and developing nine hi-tech products for financial judiciary, including an intelligent voice translation system for court proceedings, aimed at improving the quality and efficiency of financial adjudication through digital transformation.
Spotlighting service as the big picture, and implementing active justice, the SFC has been striving to ensure high-quality economic and social development of Shanghai
In its commitment to serving the objectives set by the CPC Central Committee when establishing the SFC, the SFC has been actively integrating itself into the strategic layout of the construction of Shanghai as an international financial center. Specialists from the World Bank highly praised the SFC “powerfully enhancing the internationalization, rule of law, and facilitation of Shanghai's Business Environment” and believed that the establishment of the SFC has served as “a best practice for strengthening the global rule of law.”
The SFC has provided precise services to serve the implementation of national major strategies. Concentrating on the three major tasks assigned by the CPC Central Committee to Shanghai, the SFC has formulated opinions to serve and support the establishment of the sci-tech innovation board (also known as the STAR market) and the pilot registration-based reform, as well as measures to assure financial openness and innovation in the Lin-gang Special Area of China (Shanghai) Pilot Free Trade Zone. The court has efficiently implemented 41 support measures, offering more targeted judicial services to facilitate structural reforms and institutional opening-up in Shanghai’s financial sector. The SFC has also led the establishment of the first cross-regional financial judicial cooperation mechanism in China by intermediate people’s courts in the Yangtze River Delta region, promoting unified financial adjudication standards and ensuring high-quality integrated development of the region.
The SFC has provided full-scope safeguards for preventing and resolving major financial risks. By resorting to judicial adjudication and big data analysis, the cSFC has delved deep into cases to identify hidden financial risk factors. The SFC has submitted 35 judicial recommendations to various departments, including the People’s Bank of China and the State-owned Assets Supervision and Administration Commission of the State Council, receiving positive feedback and responses. The SFC has established a mechanism for publishing annual reports on financial and legal risk prevention, and offered systematic advice on industry risk prevention from a judicial perspective. The SFC has also created a coordinated mechanism for the prevention and resolution of financial risks by financial judiciary and financial supervision, shaped a new model of collaborative and good governance by financial judiciary and financial supervision, and garnering high recognition and active responses from various participants in the financial market.
The SFC has provided solid support for the ongoing deepening of financial reform and opening-up. The court has pioneered a case testing mechanism for the financial market in China, and properly concluded the first testing case of the Chinese financial market, thereby providing impetus for China’s leadership in shaping international financial market rules. It has actively exercised jurisdiction over foreign-related financial cases, and formulated and promoted “Model Clauses for the Resolution of Overseas Financial Disputes and its Governing Laws”, both in Chinese and English. It has engaged in dialogues and exchanges with more than 50 countries, regions, and international organizations, including the World Bank and the Shanghai Cooperation Organization. Visiting delegations have highly praised its efforts and expressed willingness for cooperation. By publishing typical cases and cutting-edge research results in both Chinese and English on renowned global legal platforms with over 5.056 million reads, it has enhanced the influence of China’s financial judiciary, continuously reinforcing the soft power of Shanghai as an international financial center.
Dedicated to upholding justice for the people, sticking to fairness and efficiency, the SFC has been committed to protecting the legitimate rights and interests of small and medium-sized investors.
China is home to the world’s largest and most active group of individual investors. Upon this reality, the SFC centers its efforts on both fairness and efficiency, consistently meeting the new expectations and demands of the people for financial judiciary in this new era.
The SFC has been committed to building a world-leading collective litigation model. Upholding a pioneering spirit, the SFC has developed a systematic solution for securities disputes with core components such as exemplary judgments, representative litigation, and specialized litigation-mediation coordination. The SFC has created China’s first mechanism for the full-cycle distribution of compensation funds in securities accounts, which enables compensation to be directly transferred to investors’ securities accounts, thus bridging the final gap in safeguarding the rights of small and medium-sized investors. The SFC has implemented the trial mechanism for the insurance institution’s subrogation recovery from the board of directors, supervisors, and senior executives and the mechanism for prioritization of civil liability for securities infringement, continuously expanding new areas under judicial protection for investors. It has been actively exploring the best solutions for investor rights protection that are both pursuant to the Chinese conditions and world-leading.
The SFC has been making utmost endeavors to create a smart litigation service model that satisfies the people. The SFC has independently developed a smart case-filing system and launched the first comprehensive platform for investor judicial protection across the national court system, significantly improving case-filing and preservation efficiency, with an online case-filing rate of 97.1%. The “Securities Investor Protection Chamber”, which was developed by the SFC, offers paperless, one-stop, interactive litigation service, serves as a practical example of the World Bank’s “reducing processes, streamlining procedures, and lowering costs” methodology for assessing the business environment. It has received widespread acclaim from small and medium-sized investors.
The SFC has been vigorously innovating China’s distinctive, diversified dispute resolution system. The SFC upholds the principles of systematic integration, efficiency, and convenience. The SFC has established a mechanism for coordinating litigation and mediation in financial disputes that covers the entire financial industry, provides fully online platform services, and spans from entrusted dispute settlement to agreement execution throughout the entire process. This mechanism meets the need of small and medium-sized investors for the “one-click” dispute resolution, effectively conserving judicial resources and reducing societal costs. The SFC has also adopted a resource-integrated, multi-dimensional approach. The SFC has pioneered the comprehensive preliminary mediation commitment mechanism for financial disputes, and first advocated for and facilitated the inclusion of diversified resolutions for securities disputes in the Rules Governing the Listing of Stocks on Shanghai Stock Exchange, which leads to the efficient resolution of pre-litigation disputes involving listed companies, and safeguards the stable and regulated development of the securities market.
Concentrating efforts on team building, the SFC adheres to rigorous management with care and is committed to creating a strong team of judicial personnel who are loyal, upright, and responsible.
Understanding keenly the political nature of the SFC, the court has worked diligently to build a strong and versatile team of interdisciplinary financial judges that contribute to Shanghai’s development as an international financial center.
The SFC has nurtured its root and soul based on political advancement. The court has conducted thorough education and rectification of the political and legal team, carried out thematic education such as studying and implementing Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era. It has also innovated a party-building model termed “integration” that deeply integrates party-building work with trial and enforcement, earning the title of an “Advanced Collective in the Party-building Work of People’s Courts” by the Supreme People’s Court on the occasion of the 100th anniversary of the founding of the Communist Party of China.
The SFC has strengthen its competence to undertake more responsibility. The court has innovated a “Four-Advanced” mechanism for talent development. For four consecutive years, the SFC has partnered with the Shanghai Advanced Institute of Finance at Shanghai Jiao Tong University to hold the “Financial Rule of Law Elite Class”. The SFC has established routine exchanges and training programs with financial regulatory agencies to which its employees are sent to serve temporary positions, and sent multiple judges abroad for study. The SFC has created renowned platforms such as the “Financial Lecture Hall” and “Wisdom Salon of Law”, established research societies on Xi Jinping Thought on the Rule of Law, advanced financial judiciary, foreign-related financial judiciary translation, and digital empowerment, thereby building a team of financial judges with knowledge, expertise, modern judicial thinking, and an international perspective. This team has produced a number of outstanding figures in the field of trial and role models, including national experts in judicial business, outstanding judges nationwide, model workers in the judicial system, and advanced individuals in people’s courts across the country.
The SFC has emphasized the construction of an honest team that boasts integrity and ethics. It has established four lines of defense in education, system, supervision, and accountability, rigorously implementing the “Three Provisions”. Over the past five years since its inception, the court has developed 124 rules and regulations, applying institutional rules to manage personnel, affairs, authority, and cases. The SFC has created a comprehensive, accountable, and ahead-of-time mechanism of long-term prevention and control of potential corruption. Through innovative mechanisms such as the “1+3+3” specialized adjudication mechanism and the centralized and decentralized execution mechanism for financial cases, the court has achieved full-process supervision and constraint over the powers of investigation, adjudication, and execution. The court has also established a “Home-Court Interaction” integrity-building mechanism, appointed integrity supervisors at both the court and division levels, and built a community with shared responsibility for anti-corruption and integrity within the court, which result in a record of “zero” illegal or disciplinary cases involving anyone of the court in the first five years since its establishment.
As the first five years of the SFC come to a close, the court is committed to continuing its efforts in contributing to the high-quality development of financial judiciary in China. It will remain dedicated to implementing national strategies, leading international rule-making, and enhancing the well-being of the people. The court will, in a more confident, pragmatic, and energized fashion, leverage the location advantage of Shanghai as an international financial center, its status as the nation’s first specialized financial court, and its expertise in concentrated and specialized jurisdiction to work towards the goal of becoming a “specialized, international, and intelligent” world-class financial court. It aims to contribute to Shanghai’s development as an international financial judicial center, provide high-quality financial judicial services for the construction of Shanghai as an international financial center, and modernize its judicial work to support Chinese modernization, remarked Zhao Hong, secretary of the Party Leadership Group and president of the SFC.
The conference also featured the presentation of five-year typical cases, innovative mechanisms, and achievements in talent cultivation by Lin Xiaonie, member of the Party Leadership Group and vice president of the court. The press conference was chaired by Ren Wenyong, member of the Party Leadership Group and director of the Political Department of the court. Over 30 media outlets, including People’s Daily, Xinhua News Agency, Legal Daily, Jiefang Daily, and Shanghai TV, attended the event.
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