The Supreme People’s Court (SPC) released regulations to clarify the jurisdiction of the Shanghai Financial Court, as reported by Caixin on August 9. Apart from traditional and common disputes related to licensed financial institutions, as well as bankruptcy cases, the Shanghai Financial Court will also oversee new types of financial and commercial litigation, involving private equity, online P2P lending, non-banking online payment, and more. Ordinary private and informal lending cases will be excluded. The regulations come into force on August 10.
In recent years, the number of financial and commercial cases has increased rapidly in Shanghai, growing by an average of 51% a year from 2013 to 2017. In 2017 alone, courts in Shanghai accepted and heard over 179,000 such cases. However, private equity-related cases and other new types of disputes were not subject to the most efficient supervision. For instance, this past June, Shanghai-based Fuxing Group’s four private funds were suspected of commercial fraud and illegal fundraising, and the amount involved was as much as RMB30bn. Several individual investors have sued, but courts have not given any confirmation receipts or taken further actions. The launch of this specialized court can bring about a more centralized jurisdiction for financial cases in Shanghai.