From market opening-up to institutional opening-up, from traditional financial element opening-up to new financial element opening-up, and from allocating international funds to allocating global assets… Shanghai’s financial market has been more and more open to the world. How can the city deepen cooperation and allow the rule of law to keep high-level financial openness on course? On June 9, 2023, “Financial Opening-up and Cooperation with Legal Guarantees”, an international symposium of the 14th Lujiazui Forum, was held in Shanghai. Experts from the international financial industry, legal field, and regulatory agencies, along with representatives from the Supreme People’s Court and Shanghai courts, gathered to have heated discussions about cutting-edge issues in the financial and legal sectors, from concepts and rules to technology.
Liu Guixiang, permanent member of the Supreme People’s Court’s Judicial Committee (vice-minister level), and Jia Yu, secretary of the Party Leadership Group and president of the Shanghai High People’s Court, attended the meeting and delivered speeches. Jin Penghui, deputy director of the Shanghai Head Office of the People’s Bank of China (PBOC) and president of PBOC’s Shanghai Branch, Zhao Hong, secretary of the Party Leadership Group and president of the Shanghai Financial Court (SFC), Qian Jun, professor of Finance and executive dean at Fanhai International School of Finance, Fudan University, Aedit Abdullah, High Court Judge of the Supreme Court of Singapore, Nitzan Shilon, Associate Professor at the School of Transnational Law at Peking University, and John Harold Rogers, former Senior Adviser to the Board of Governors of the Federal Reserve System, Washington, D.C., attended the conference and delivered keynote speeches.
As the first specialized financial court in China, the SFC has, in its more than four years of existence, persistently harnessed the effectiveness of financial justice to serve and ensure high-level financial opening-up. Additionally, it has placed great importance on handling foreign-related financial cases, and has been committed to supporting the development of Shanghai as an international financial center. It aspires to be a “golden business card” introducing China to the world and a “window to China’s judicature” for the international community. At the symposium, Zhao Hong shared a series of experiences that the SFC has developed in exploring new approaches for financial judicial services to support high-level reform and opening-up. These experiences are replicable and can be promoted in other places.
First, emphasis has been placed on the role of adjudication to ensure the high-quality and efficient resolution of foreign-related financial disputes. Efforts have been made to establish a financial judicial support system for foreign-related cases characterized by fair trials, efficient procedures, convenient litigation, and predictable judgments, aiming to attract more domestic and foreign parties to choose Shanghai as the location for the resolution of international financial disputes. To promote justice through specialization, the SFC has built a team of highly qualified and interdisciplinary professionals specialized in financial judicature with a global financial perspective, detailed knowledge of international rules and practices, and rich experience in foreign-related adjudication. Collaboration with universities has helped to improve the mechanism for ascertaining foreign laws, and an expert roster in international financial law has been established to meet the quality requirements of parties choosing foreign laws to resolve disputes. Innovations have been implemented to enhance efficiency. Innovative mechanisms, such as the Five-Tier Method for separating complex cases from simple ones and the Securities model Judgment Mechanism, have been established based on the characteristics of financial cases. These mechanisms meet the requirements of domestic and foreign parties for high efficiency and reduce litigation costs. Technology has been leveraged to promote convenience. Efforts have been made to optimize the efficiency of online case handling. An independently developed intelligent voice translation system for court proceedings has been put into use, providing convenience for domestic and foreign parties participating in litigation and overseas market entities seeking to understand China’s financial judiciary. Conformity to rules has been promoted to ensure predictability. Through the trial of major foreign-related cases, such as offshore bond disputes involving “a keepwell deed”, the court has facilitated unification of applicable laws, stabilized judgment expectations, conveyed value orientations, and regulated industry behavior. This has enhanced the confidence of financial market entities.
Second, emphasis has been placed on extending judicial functions to safeguard financial institutional openness, and to serve the major strategy for opening-up to the outside world. Measures and opinions have been formulated to provide targeted judicial support for financial market internationalization, including those designed to serve and safeguard the financial opening-up and innovative development of the Lin-gang Special Area, and the establishment of the Science and Technology Innovation Board (SSE STAR Market) along with the pilot registration-based IPO system. To prevent legal risks in foreign-related finance, proactive judicial recommendations have been issued, a publication mechanism for annual financial legal risk prevention reports has been established, and a collaborative mechanism between financial judiciary and financial regulatory authorities for preventing and resolving financial risks has been constructed. All these measures reflect the resolution to firmly hold the bottom line of preventing systemic financial risks. To ensure that foreign-related financial innovations comply with the law, a financial market case testing mechanism has been introduced, which aligns with the concepts of governance of litigation sources and regulatory sandbox. This mechanism provides clear rule guidance for Shanghai’s financial reform and opening-up. The completion of the first financial market testing case has linked up domestic rules with international standards, and provided legal support for the “Swap Connect” project between the Chinese Mainland and Hong Kong.
Third, efforts have been focused on facilitating international exchanges, and advocating global exchange and cooperation in financial judicature. Endeavors have been made to consolidate consensus and fully leverage the SFC’s role as China’s International Exchange Center for Judicial Exchanges in Financial Adjudication (Shanghai). It has engaged in dialogues with delegations from multiple countries, regions, and international organizations, promoting dialogue and cooperation with them. Bridges of communication have been built, such as the establishment of the Cross-border Financial Justice Translation and Research Society, and the publication of English versions of typical cases on internationally renowned legal information platforms. These efforts aim to showcase new trends in financial development and convey China’s attitude toward financial justice.
Zhao Hong stated that the SFC will always, focusing on its financial adjudication function, make all-out efforts to serve the development of Shanghai as an international financial center, and ensure the constant deepening of China’s high-level financial opening-up. It is willing to strengthen communication with other countries and various sectors of society, build up consensus, and contribute to the healthy and stable development of global financial markets based on the force of law.
This forum was hosted by the Shanghai Municipal People’s Government, the People’s Bank of China, the National Financial Regulatory Administration, and the China Securities Regulatory Commission. Wu Jinshui, member of the Party Leadership Group and vice president of the Shanghai High People’s Court, delivered the opening remarks, and Luo Peixin, member of the Party Committee and deputy director of the Shanghai Judicial Bureau, presided over the special session.
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