The two departments plan to stipulate that the property of the securities violator shall be given priority to bear civil compensation

2022-05-12 0 By

According to the CSRC website on March 11, China Securities Regulatory Commission (CSRC) and the Ministry of Finance jointly studied and drafted the Provisions on matters related to the priority of the property of securities violators to bear civil liability for compensation (draft) (hereinafter referred to as the Provisions), which are now soliciting public opinions.There are fourteen articles in the Provisions, which specify the specific working mechanism for the administrative fines and confiscations paid by the wrongdoer to bear the liability for civil compensation, mainly including the following contents: 1.If the remaining property after the payment of the penalty is insufficient to bear the civil compensation liability, he shall file a lawsuit with the people’s court and obtain a winning judgment or a conciliation statement.The aggrieved investor who has not received the full amount of compensation after compulsory execution by the people’s court or distribution in the bankruptcy liquidation procedure may file a written application;The investor protection agency that acts as the litigation representative in the ordinary representative litigation and the special representative in the litigation may file an application on behalf of the aggrieved investor.The second is about the application period and amount.The aggrieved investor may file an application within one year after the people’s court issues the written order for termination of execution;Where the lawbreaker is declared bankrupt by the people’s court, he shall file an application within one year after the conclusion of the bankruptcy procedure or the additional distribution procedure;The CSRC shall not accept the application filed more than one year ago.The amount applied by the aggrieved investor shall not exceed the amount of compensation to be borne by the defendant as specified in the civil judgment, etc., and shall not apply for the part already performed by the defendant again.The amount of fine and confiscation used to bear civil compensation liability shall not exceed the amount of fine and confiscation actually paid by the lawbreaker. If multiple aggrieved investors submit applications at the same time and the total amount of application exceeds the amount of fine and confiscation actually paid by the lawbreaker, refund shall be made in accordance with the proportion of the amount applied by the aggrieved investor determined in accordance with the Provisions.The third is about the handling process.The main contents of the handling process are as follows: The ADMINISTRATIVE Penalty Committee of the CSRC shall accept and examine the application materials submitted by the aggrieved investor, and learn about and verify the preliminary execution of the case and the distribution of bankruptcy property to the people’s court that issues the written order on the termination of execution or the written order on the termination of bankruptcy procedure;The CSRC shall apply to the Ministry of Finance for the withdrawal of stock annually;If approved by the Ministry of Finance, the relevant fines and confiscations of the wrongdoer shall be returned to the ACCOUNT of the CSRC;Upon receipt of the withdrawn funds, the CSRC shall refund the penalty and forfeit of the wrongdoer to the injured investors in a timely manner;The CSRC shall timely notify the people’s court issuing the written order on the termination of execution or the written order on the termination of bankruptcy proceedings of the situation of the refund after handling the refund formalities, and publicize the relevant situation of the refund.Securities regulatory commission pointed out in the draft specification, the regulations is the development of practice centered on people’s ideas, improve the system of securities civil compensation system, is a comprehensive stock issuance of registration system to provide a more solid, the important measures for the rule of law guarantee for solving the civil compensation responsibility is preferred to carry out the difficult problem, to protect investors’ legitimate rights and interests has important practical significance.All sectors of society are welcome to put forward valuable opinions on the Provisions. The CSRC will further revise and improve the Provisions in conjunction with the Ministry of Finance according to the situation of soliciting public opinions.The public can provide feedback in the following ways: 1. Log in to the website of CSRC and click on the “Public Solicitation” column on the right side of the homepage to submit your opinions.2. Email: flbpublic@csrc.gov.cn3. Address: Legal Department, China Securities Regulatory Commission, Fukai Building, No.19 Finance Street, Xicheng District, Beijing, 100033, China.4. Fax: 010-88061401The deadline for feedback is April 10, 2022.