On December 13, 2018, co-sponsored by CIETAC and the China Banking Association, and organized by the Global Law Office, the Seminar on "Trend-To-Measure" Financial Risk Prevention—Hot Spots and Trend of Supervision in Capital Management Disputes was successfully held in Beijing. Wang Chengjie, Vice Chairman and Secretary General of CIETAC, Bu Xiangrui, Director of Legal Affairs as well as Principal Legal Adviser of the China Banking Association, and Zhang Xin, Partner of the Global Law Office, attended and addressed the seminar. Nearly 200 participants, including judges, arbitrators, representatives of financial institutions, lawyers and experts and scholars, attended the seminar.

Secretary General Wang Chengjie pointed out that in recent years, China's financial industry has developed rapidly, accompanied by new scientific and technological revolution and industrial development, the financial innovation has prospered and the number of disputes over large capital management products has been on the rise, and financial cases have presented a diversified and complicated trend. In 2017, CIETAC accepted a total of 397 financial cases, and the amount of financial cases was 19.078 billion yuan, and the average amount per case reached 48.05 million yuan. By the end of November 2018, CIETAC has received 454 financial cases this year, with an amount of 43.91 billion yuan and an average amount of 96.71 million yuan per case, an increase of 101.2% compared to a year earlier. Financial cases have become an important type of the CIETAC’s caseload. The complex and diverse characteristics of financial cases put forward higher requirements for CIETAC’s professionalism in dispute resolution. On current CIETAC Panel of Arbitrators, nearly 300 experts are from the financial fieldamong the total of more than 1400 arbitrators. In order to provide the parties with a professional and targeted dispute resolution platform, CIETAC released the CIETAC Financial Disputes Arbitration Rules as early as 2003, and released and implemented the CIETAC International Investment Arbitration Rules in October 2017, and has established a mechanism of cooperative relations with the China Banking Association since 2007. In May 2018, CIETAC signed a cooperation framework agreement with the national SME Share Transfer System Co., Ltd. (New OTC Market). As an international commercial dispute resolution institution, CIETAC hopes to use its influence to provide a platform for the discussion and exchange through this seminar, to enhance the ability to resolve disputes in the areas of capital management and finance, to effectively guard against the legal risks of the capital management business, and to provide quality arbitration dispute resolution services in the area of capital management and finance.

(Mr. Wang Chengjie, Vice Chairman and Secretary General of CIETAC)

Director Bu Xiangrui said the seminar was an important event for the two sides to implement the 2007 Letter of Intent on Financial Cooperation Agreement and the 2015 Strategic Cooperation Framework Agreement. Over the years, the cooperation between the two sides had gradually expanded, and China Banking Association had actively recommended professional arbitrators to CIETAC and actively cooperated with CIETAC to carry out special research activities, which has achieved good social effect. Today's seminar would provide constructive guidance for the banking industry’s prevention and control and the resolution of legal risks in the capital management business. Director Bu stressed that the prevention and control of financial risks was the eternal theme of the banking industry, thus it was imminent to develop diversified means to solve the financial disputes, and we should correctly grasp the issue of the litigation tendency of financial supervision policy and create a good environment for the development of the financial industry.

(Bu Xiangrui, Director of Legal Affairs as well as the principal legal adviser of the China Banking Association)

Mr. Zhang Xin said that the seminar can be described as a gathering of elites with so many experts present. He hoped that this capital management dispute seminar would provide an opportunity for everyone to air his opinon and build an open platform. Global law Firm was pleased to be able to contribute to the success of the seminar, to unify the trial standards for future financial management disputes, and to make efforts and contributions to the further improvement of the new regulations and supporting measures.

At the end of the welcoming address session, the seminar formally entered the topical speech session. The first speaker was Mr. Zhao Jian, Vice President of CIETAC Arbitration Court. His speech revolved around the hot issues and difficult problems in the current capital management dispute arbitration, from the main characteristics of the capital management cases accepted by CIETAC, with emphasis on the basic nature of capital management contracts, the determination of the validity of capital management contracts, the radish chapter and the flight list, the appropriate obligations of financial institutions, etc. He concluded by stressing that in order to actively deal with and settle capital management disputes, we should correctly handle the relationship between the visible hand and the invisible hand in the market economy, encourage market transactions, respect market rationality, adhere to the principle of good faith, give full play to the role of arbitration in dispute resolution, and strive to provide services and guarantees for financial deleveraging, risk prevention and turning deficiency into reality.

(Mr. Zhao Jian, Vice President of the CIETAC Arbitration Court)

Mr. Bai Feipeng, the General Manager of Legal Compliance Department of the PICC Group, gave a speech subsequently. His speech revolved around legal issues related to insurance asset management products under the new situation. He first introduced the current situation of insurance asset management products, and then introduced the predicament of equity investment plan under the strong supervision environment. He then introduced the legal risk concern of the creditor's rights investment plan, and said that the insurance asset support plan was still in the initial stage of development in terms of product quantity and scale, but with the new capital management regulations and the continuous development of the Shanghai Insurance Exchange and the China Insurance Asset Registration and Transaction System Co., Ltd., the prosperous prospect of the insurance asset support program was foreseeable.

(Mr. Bai Feipeng, the General Manager of Legal Compliance Department of the PICC Group)

The speech by Ms. Lv Qi, Deputy General Manager of the Legal Affairs Department of the China Minsheng Bank, revolved around the impact of the new regulation on the design of financial products. She first introduced the impact of the new regulation on credit and investment-line products, and then she analyzed in detail the impact of the new rules on the business logic of capital management. Finally, she conducted an analysis of the challenges of courts judgments to capital management.

(Ms. Lv Qi, Deputy General Manager of the Legal Affairs Department of the China Minsheng Bank)

Ms. Wenjianxiu, the Assistant of General Manager of the legal Security Department of CITIC Bank, made a presentation on the development and change of banking regulatory business supervision and the analysis of difficult issues in the disputes. She explained the changes in the trading structure of the old and new rules of capital management. After that, She also made a detailed explanation on the types of the capital management disputes and the difficult issues in the disputes of capital management.

(Ms. Wenjianxiu, the Assistant of General Manager of the legal Security Department of CITIC Bank)

The speech of Mr. Zhang Xin, Partner of the Global Law Office, revolved around the study of contract interpretation of management disputes, the basic principle of contract interpretation of capital management contracts, how to interpret the wording of the terms, how to solve the relationship between contract interpretation and legal interpretation and how to explain the innovation in the field of capital management and the terms of the contract.

(Mr. Zhang Xin, a partner of the Global Law Office)

The afternoon session was moderated by Ms. Lv Qi, Deputy General Manager of the Legal Affairs Department of the China Minsheng Bank.

Mr. Zhao Jiuguang, Partner of the Global Law Office, from real cases, introduced in detail the diligent and conscientious issues arising from the administrator's information disclosure obligations, the significant obligations and responsibilities of the manager in one-to-one capital management projects and the obligations and responsibilities of the manager in a one-to-many capital management project.

(Lawyer Zhao Jiuguang, a partner of the Global Law Office)

Ms. Tang Shumei, Deputy General Manager of China Credit Trust, discussed the liability of trustees under the background of the new regulations, and explained the provisions on the liability of trustees in the current laws, the disputes concerning the liability of trustees and the suggestions on the determination of the fiduciary liability of trustees.

(Ms. Tang Shumei, Deputy General Manager of China Credit Trust)

Mr. Li Zhao, Partner of the Global Law Office, focusing on the main legal issues involved in the disposal of listed company shares in the judicial enforcement stage, introduced in detail the jurisdiction of stock execution cases of listed companies, the property preservation of listed company shares, the auction of non-restricted tradable shares of listed companies, the sale of non-restricted tradable shares of listed companies, the implementation measures of direct debt repayment of listed companies and the implementation of restricted circulation shares of listed companies.

(Mr. Li Zhao, Partner of the Global Law Office)

Mr. Guo Xianglong, Partner of Beijing Chu Ting Law Firm, analyzed the main points of legal dispute in the capital management cases, and focused on the issues of jurisdiction objection, the legal nature of the repurchase clause and whether the client can sue the financier directly.

(Mr. Guo Xianglong, Partner of Beijing Chu Ting Law Firm)

Mr. Wang Yue, Partner of the Global Law Office, expanded from a re-understanding of the rigid payment behavior. He analyzed the trend of referees in the first case of the Supreme Court after the implementation of the new regulation of capital management, and explained the different liabilities of the parties in case of valid or invalid contract when investment loss occurred.

(Mr. Wang Yue, Partner of the Global Law Office)

After all the topical speeches, the participants interacted and exchanged views with the speakers about issues such as the right to income, the rigid payment and the channel business. Participants expressed that the seminar was in line with its theme, the professional speakers analyzed the financial situation, developed rules according to the development of situation, and gave specific suggestions for financial institutions and legal practitioners to deal with the practice under the new regulations. The seminar was successfully concluded with a warm applause.