China has launched a new class action mechanism to crack down on corporate malfeasance in the securities market. Although legal actions by individual investors were possible previously, this was often difficult and costly. Under the new mechanism, the China Securities Investor Services Centre, a Chinese government-affiliated body, can sue on behalf of no fewer than 50 investors in a company, on an opt-in basis. The finding by a court or a regulator that a company has broken the rules or an admission by the company of wrongdoing is a prerequisite for the commencing of a class action.
For more information, see Xinhua article in English and Supreme People’s Court announcement – in Chinese only.