SCIA visits FINRA to foster Sino-US securities arbitration dialogue

In a bid to bolster observe the latest developments of securities arbitration in the United States, a delegation from the Shenzhen Court of International Arbitration (SCIA) and China (Shenzhen) Securities Arbitration Center visited the Midwest Regional Office of the Financial Industry Regulatory Authority (FINRA) Dispute Resolution Services in Chicago on March 14, 2024.

As the most significant securities arbitration platform in the U.S., FINRA has been providing arbitration and mediation services to the U.S. capital markets and has resolved a substantial number of market disputes over the years.

During the visit, Richard Berry, Executive Vice President of FINRA Dispute Resolution, provided insights into the latest developments in FINRA’s dispute resolution and expressed his anticipation for an exchange of experiences in securities arbitration with SCIA. Dr. Liu Xiaochun, President of the SCIA, shed light on the overarching advancements in international commercial arbitration and mediation within the Shenzhen Special Economic Zone in China.

Dr. Liu highlighted two stages of innovation in dispute resolution mechanisms for China’s capital market: In 2013, with the support of the China Securities Regulatory Commission (CSRC) and its Shenzhen Regulatory Bureau, SCIA and the Shenzhen Stock Exchange cooperated to establish the first mediation institution for China’s capital market – the Shenzhen Securities and Futures Dispute Resolution Center, which created a “Four-in-One” dispute resolution mechanism integrating “mediation, arbitration,  self-discipline, and administrative regulation”. In 2021, with the support of the CSRC and the Ministry of Justice, SCIA implemented the first pilot project of securities arbitration in China, establishing the China (Shenzhen) Securities Arbitration Center, which had resolved disputes amounting to RMB 57.311 billion yuan by the end of February 2024.

The dialogue between SCIA and FINRA delved into the operational mechanics of capital market dispute resolution, encompassing arbitration and mediation procedures, as well as the pivotal nexus between neutral and impartial dispute resolution mechanisms and the protection of the lawful rights and interests of small to medium investors.

Morgan Johnson, Associate Regional Director of the FINRA Dispute Resolution Services Midwest Regional Office, Chen Qiaomei, Assistant to the SCIA President and Director of China (Shenzhen) Intellectual Property Arbitration Center, Huang Guoyong, Director of the International Cooperation and Development Department of SCIA and Director of the SCIA Jiangmen Center, alongside representatives from SCIA, participated in the discussions.