Chinese courts to protect STAR Market

Courts across the country will be required to offer full protection and better legal services to China's newly launched Nasdaq-style tech board, in order to safeguard the healthy development of the country's capital market.

The Supreme People's Court, the nation's top court, issued a guideline on Friday urging all courts to improve hearings on securities-related cases, keep the capital market in order and safeguard the legitimate rights of investors.

The guideline could form the legal foundation for the country's STAR Market, known informally as the science and technology innovation board, which was launched at the Shanghai Stock Exchange on June 13.

The launch is considered a milestone in the nation's capital market development, as it is the first submarket in China to adopt the registration-based initial public offerings (IPO) mechanism – a core system of market-oriented reforms.

The guideline requires courts nationwide to increase intellectual property protection for listed companies on the board and allows for heavier punishments for those who infringe on these rights.

It also highlights the fight against financial corruption and securities-related crimes, and outlines strict punishments for people who disturb registration-based IPOs, as well as increased fines for insider trading and market manipulation.

People and enterprises that embezzle government funds meant to support the tech industry will face criminal liability, while securities-related offenders are less likely to be given suspended sentences, the guideline said.

China has more than 150 million stock investors, "and the stock market has become increasingly close to people's daily life," Liu Guixiang, a senior judge from the top court, said on Friday.

He said courts at all levels will better protect the legitimate rights of stock investors and help maintain order in China's capital market.