China 2021 Dispute Resolution, E-Commerce and Securities Updates

Dispute Resolution

China’s Supreme Court Publishes Provisions on Providing Online Case Filing Services for Cross-Border Litigants


On Feb. 3, 2021, the Supreme People’s Court published Several Provisions on Providing Online Case Filing Services for Cross-Border Litigants (Provisions), which took effect on the same date. According to the Provisions, online registration, case filing services (along with guidelines and inquiry services for online case filings), and online video verification for appointment of attorneys must be provided for cross-border litigants, including foreigners, residents of the Hong Kong Special Administrative Region, Macao Special Administrative Region, Taiwan Region, and citizens of mainland China with their habitual domiciles located in foreign countries or Hong Kong, Macao, or Taiwan, and enterprises and organizations registered in foreign countries or Hong Kong, Macao, or Taiwan. The scope of cases that can be filed via the online service includes first-instance civil and commercial lawsuits.

The above services are provided under the “cross-jurisdiction case filing” function via the “China Mobile Micro Court,” which can be accessed through an applet embedded in WeChat (China’s most popular mobile social media platform). Therefore, the litigants first need to download and register with WeChat on their mobile phones if they want to use China Mobile Micro Court to file a case. Currently, WeChat is the only available way for cross-border litigants to file cases online (either through the applet or the web version). The current version of the WeChat applet provides three language options (i.e., simplified Chinese, traditional Chinese, and English) and five identification types for the litigants (i.e., P.R.C. identification card, Mainland travel permit for Hong Kong and Macau Residents, Mainland travel permit for Taiwan Residents, passport for Chinese citizens residing abroad, or P.R.C. regular passport).

When a cross-border litigant first applies for an online case filing, the identity of the litigant must be verified. The online identification verification relies on platforms such as the National Immigration Administration and is confirmed based on the information retained in such identity verification platform. The result of the identification verification must be notified to the litigants within three working days. If the online verification fails, the litigant must submit the identification materials (including the materials related to the notarization, certification, transmission, and verification for delivery) for manual verification by the court that accepts the case. Therefore, online case filing affords convenience to those natural persons with their identity information already existing in the database/platform of the National Immigration Administration. Companies/enterprises still need to go through the formalities of notarization and certification.

After the identity verification, if the authenticated litigant entrusts a lawyer from mainland China as agent ad item, the litigant may apply to the court which accepts the case for an online verification. The online verification will be launched by a judge, and the online video verification meeting will include the cross-border litigant, the judge, the agent ad litem at the same time, and the interpreter if the common language of P.R.C. is not used by the litigant. During the online verification by the judge, the litigant and the agent ad litem must sign the relevant entrustment documents. They no longer need to go through the formalities of notarization and certification, or notarization and transmission (the transmission is conducted being affixed with the seal of the China Legal Service (H.K.) Ltd. or China Legal Service (Macao) Ltd. after the notarization of the identity certificates and such materials for the resident of the Hong Kong or Macao Special Administrative Regions or the company/enterprise or the representative of it in the Hong Kong or Macao Special Administrative Regions).

After the online verification meeting, the agent ad litem may, on behalf of the litigant, carry out online case filing (including the documents such as the statement of complaint, identity certificate of the litigant and materials related to the notarization, certification, transmission, verification by mail (if any), evidentiary materials), online payment and other matters. For the case applied online (a) which complies with the legal provisions, the court that accepts the case will register and file the case in a timely manner; (b) which does not comply with the requirements, the court that accepts the case will notify the litigant in a one-off manner to supplement and correct (which shall be done within 15 days); (c) which is difficult to immediately determine whether complies with the legal provisions, the court that accepts the case will decide within seven working days whether to register and file the case. The cross-border litigant can inquire online about the above-referenced progress.


4 Cyberspace Administration Departments in China Jointly Release Rules on the Scope of Necessary Personal Information for Common Types of Mobile Internet Applications


On Mach 12, 2021, four cyberspace administration departments in China (i.e., Cyberspace Administration of China, Ministry of Industry and Information Technology, Ministry of Public Security, State Administration for Market Regulation) jointly released the Rules on Scope of Necessary Personal Information for Common Types of Mobile Internet Applications (the Rules), which took effect May 1, 2021.

The Rules were made under the Cybersecurity Law, which requires that network operators who collect and use personal information (PI) follow the principles of legitimacy, rightfulness, and necessity. Any mobile internet applications (apps) running on a smart mobile terminal, including apps pre-installed or to be downloaded and installed on a smart mobile terminal as well as mini-programs developed to connect to an open platform of an app that can be used without being installed by users, should comply with the Rules.

The Rules specify the scope of necessary PI for 39 common types of apps as examples, e.g.,  maps and navigation apps, instant messaging apps, online shopping apps, food delivery apps, etc. The Rules also reveal that PI must not be required for use of basic functions and services in live streaming apps, short video apps, workout and fitness apps, etc. App types not included in the Rules may consider referring to a similar app type specified in the Rules. In principle, the app operators should ensure that such PI collected by them is necessary for running basic functions of apps.

The Rules emphasize that the collection of PI by apps is only allowed to the extent necessary to ensure the normal operation of any basic function or service of an app. For those users who do not consent to providing unnecessary PI, apps must still provide them basic functions and services. Any violations of the Rules are subject to administrative penalties.

SAMR Issues Measures for the Supervision and Administration of Online Transactions


On March 15, 2021, the State Administration for Market Regulation (SAMR) issued Measures for the Supervision and Administration of Online Transactions (the Measures), which took effect May 1, 2021. The Measures were made under the E-Commerce Law and will replace SAMR’s 2014 Administrative Measures for Online Trading.

Highlights of the Measures are as follows:

  • Online Transaction Operators

    According to the E-Commerce Law, online transaction operators (operators) must register with the competent administration for market regulation, except for individuals using their own skills such as cleaning, hair-cutting, key-making, etc. to provide personal services and odd small-amount transaction activities that do not require any permissions under the law. The Measures specifically define these two types of exemption from registration, giving examples of “convenient service” (e.g., cleaning, washing, sewing, hairdressing, moving, key making, pipeline dredging, etc.) and clearly define “odd small amount transaction activities” (i.e., with the cumulative annual transaction amount of not more than CNY100,000 (approx. USD15,500).

    Meanwhile, with the growth of livestreaming, selling products live online has become a new e-commerce mechanism. The Measures include such online transaction activities (based on online business premises that provide product browsing, order generation, and online payment services) into the regime of online transaction operators, which should fulfill obligations in accordance with the law.

  • Personal Information (PI)

    The Measures re-emphasize that operators collecting and using PI should abide Cybersecurity Law principles of legitimacy, rightfulness, and necessity, and obtain informed consent from users. The Measures further specify that the requirements of obtaining consent, one-off general authorization, default authorization, bundled authorization, cessation of installation and use, etc. are not permitted for the purpose of preventing massive unnecessary PI being collected. As to sensitive information, including but not limited to personal biological characteristics, medical and health care, financial account and personal whereabouts, the operator must obtain consent separately.

  • Consumer Rights and Interests

    The Measures highlight the growing field of online consumer rights, ensuring consumers’ right to know and right to choose. Operators should remind consumers in a prominent manner if operators a) perform tie-in sales of any commodity or service to consumers by means of direct bundling or the provision of multiple options; b) provide any service by means of automatic extension or automatic renewal, etc. Standard terms should not contain any contents exempting or restricting a consumer’s rights for after-sale services, rights to change or rescind a contract in accordance with the law, rights to lodge complaints, blow the whistle, request mediation, etc.

  • Anti-Unfair Competition

    The Measures set forth substantial rules to regulate the practice of “choosing one from two” e-commerce platforms. Pursuant to the Measures, platforms may not abuse their dominant position to impose any unreasonable restriction or attach any unreasonable condition (e.g., block store of the operator, increase service charge, etc.) to interfere with the business of platform operators. Platform operators could independently choose to carry out business activities on multiple platforms at the same time as well as independently select express delivery for their transactions.

    If platforms act against the above rules, they will receive administrative penalties of up to CNY2,000,000 (approx. USD311,000).


CSRC Promulgates Revised Administrative Measures for Information Disclosure by Listed Companies


On March 19, 2021, the China Securities Regulatory Commission (CSRC) promulgated the Revised Administrative Measures for the Information Disclosure by Listed Companies (Revised Measures), which took effect May 1, 2021. Following the 2019 revision of the Securities Law, the Revised Measures add and modify the rules regarding information disclosure.

  • Information Disclosure Obligor

    The Revised Measures add the definition of information disclosure obligors (IDO), which refer to listed companies and their directors, supervisors, senior executives, shareholders, actual controllers, acquirers, as well as all parties related to material asset restructuring, refinancing and material transactions, and other natural persons, entities and relevant personnel thereof, bankruptcy administrators and their members, and other entities assuming the information disclosure obligation as prescribed by laws, administrative regulations, and the provisions of the CSRC.

  • Content of Information Disclosure

    The Revised Measures encourage IDOs to voluntarily disclose information other than contents required to be disclosed in accordance with the law. The information being disclosed should maintain continuity and consistency; making selective disclosures and using the disclosed information to exert undue influence on the trading price of any company’s securities or derivatives are not allowed.

  • Methods of Information Disclosure

    Periodic reports and ad-hoc reports are important documents for investors obtaining company information. In the Revised Measures, periodic reports only include annual reports and interim reports and exclude quarterly reports, which will be governed by other laws and regulations. At the same time, the Revised Measures further specify 17 material events that need to be disclosed to investors through ad-hoc reports, except for situations specified in Article 80 of the Securities Law, including but not limited to any large-amount compensation liability incurred by the company, any provision made by the company for large-amount asset impairment, etc. 

    In order to make sure the information disclosed by a company is true and accurate, the Revised Measures require that the periodic report be adopted by the listed company’s board of directors. Where directors are unable to guarantee the authenticity, accuracy and completeness of the periodic report, they must vote again and not affix their signatures to written confirmation comments on the periodic report. New requirements for conciseness, distinctness, and clarity have been added in the Revised Measures to improve the principle of fair disclosure. At the same time, the responsibilities of directors, supervisors and officers have been further emphasized.

CSRC Issues Decision on Revising the Provisions on the Equity Management of Securities Companies


To better implement the Securities Law, on March 19, 2021, the CSRC issued its Decision on Revising the Provisions on the Equity Management of Securities Companies (Equity Management Rules) and Decision on Revising the Provisions on Issues Concerning the Implementation of the Provisions on the Equity Management of Securities Companies (Implement Rules). Both rules took effect April 18, 2021.

The following chart summarizes the main changes included in the decisions:


Before being revised

After being revised


Definition of major shareholder

Holds over 25% of a securities company’s equity or the biggest shareholder that holds over 5% of the equity.

Holds 5% or more of a securities company’s equity.

To address the developing trend of shareholders of securities companies being dispersed.

Requirements for major shareholder

Net assets are not less than CNY200 million.

Net assets are not less than CNY50 million.

Major shareholder of securities company has lower thresholds, with lower requirements on net assets and is not required to have sustained profitability.

The first major shareholder must have experience in finance-related business that matches the securities company’s business scope and have developed a risk disposal plan.

The first major shareholder must have same requirements as actual control shareholder.

Bet-on agreement

Any bet-on agreement regarding the equity of securities company is prohibited.


Actually held by non-financial enterprise

The equity of a securities company actually held by a single non-financial enterprise must be up to 50% in principle.

Exceptions including the circumstance recognized by the CSRC for disposal of the securities company’s risks.


Filing and approval procedure

Where a securities company intends to increase its registered capital, it must report to the CSRC for approval.

A securities company that intends to change its registered capital must file with the CSRC in principle.

Simplify corresponding administrative procedures.

* This GT Newsletter is limited to non-U.S. matters and law.

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National Law Review, Volume XI, Number 145