Securities representative actions encouraged, CSRC says

China will encourage the development of representative actions in the securities market to strengthen investor protection while improving the system of listed firm independent directors, the country's top securities regulator said on Saturday.

Wang Jianjun, vice-chairman of the China Securities Regulatory Commission, said the commission will make protecting investors' legitimate rights a key regulatory focus, improve various rules regarding investor protection and develop representative actions into a regular practice.

Representative actions refer to lawsuits in which one or a few members of a group sue on behalf of the larger group.

In November, a Chinese court ruled against Kangmei Pharmaceutical Co Ltd, a listed firm engaging in financial fraud, marking the first special representative action in the country's capital market, meaning an investor protection institution represents investors in a securities suit.

While marking a milestone of strengthening crackdowns on listed firms' illegal activities, the suit also sparked discussions over how much liability independent directors should bear in listed firms' false statements, Wang said.

Paying heed to market opinions on this topic, the commission has organized studies to clarify the duty of independent directors and improve the independent director system so different market participants can better perform their duty, Wang said.

He made the remarks on Saturday when addressing the annual meeting of the International Finance Forum via video.