23 January 2018, Li Ming, the General Manager of the National Equities Exchange and Quotations Co., Ltd. (hereinafter referred to as NEEQ"), and Liu Xiaochun, the Vice Chairman as well as the Legal Representative of Shenzhen Securities and Futures Dispute Resolution Centre (hereinafter referred to as "SFDRC"), have signed a memorandum of strategic cooperation in Shenzhen on behalf of both entities. 

Under the correct leadership of the CSRC and with the strong support from the society, the number of listed enterprises in NEEQ has reached more than 11600, and the cumulative amount of trading and that of initial share offering both have exceeded 400 billion yuan, after five years persistent efforts of NEEQ as a national securities exchange approved by the State Council. It also marks a milestone of the deepening of the reform of NEEQ that the reform of multi-tier system of organisation for the stocks listed by NEEQ and that of trading system have implemented smoothly at the end of 2017.

With the continuous expansion of the market scale and the increasing complexity of various interests, it appears to be a trend that the economic disputes among investors, securities companies, listed companies and their directors, supervisors, senior managers and other types of market participants increase rapidly. At the same time, NEEQ is an emerging market, the regulation of which is in need of further improvement, where the investment habits of investors have not been fixed, the governance level of listed corporations remains to be enhanced, and pertinent disputes seem to be novel, complex and frequent. It is therefore necessary to further explore an approach of dispute resolution which is professional, authoritative, low-cost and highly efficient, in order to effectively resolve all kinds of disputes, strictly guard against market risks, and effectively protect the interests of investors.

SFDRC is the first dispute resolution institution that closely integrates arbitration with mediation in the Chinese mainland capital markets., which creates a new mode of “Four-Pronged Overall Plan” dispute resolution, integrating professional mediation, commercial arbitration, industry self-discipline, and administrative regulation，having successfully solved a large number of disputes in the capital market since established. By the end of 2017, Shenzhen Securities Dispute Resolution Center has accepted 2,582 different kinds of consultations, including 544 cases of mediation, among which SSDRC completed 540 cases and successfully mediated 498 cases with a success rate of about 92.2% and an amount of money of compromise of more than RMB 566 million, since its establishment four years before. Recently, the center accepted and successfully resolved the first domestic listed company control dispute between Changyuan group and the Wore Heat-Shrinkable Material , the settlement is more than 2.436 billion yuan, which widely attracted the attention of capital market.

The signature of Memorandum of Strategic Cooperation of NEEQ and SFDRC is requested by the spirit of the 19th National Congress of the Communist Party of China and Central Economic working Conference. It is also an important measure put forward by the Supreme People’s Court and the China Securities Regulatory Commission to carry out the spirit of securities and future dispute multimodal mediation mechanisms pilot, which not only provides market participants with a more efficient, professional and low-cost dispute resolution, but also offers a solid institutional safeguards for NEEQ to deepen reform and develop from "quantitative development" to "qualitative promotion" by protecting the lawful rights and interests of investors and improving the market risk management rules.

According to the memorandum of cooperation, NEEQ will act as the governing unit to support the development and innovation of the mode of “Four-Pronged Overall Plan” dispute resolution of SFDRC. NEEQ shall timely guide all kinds of disputes suitable for mediation to SFDRC for settlement; SFDRC selects senior experts with professional background, mediation ability, good credibility and professional integrity to provide professional, fast and commonweal mediation services to the parties to resolve disputes in a timely and effective manner; With the aid of the mode of “Four-Pronged Overall Plan” dispute resolution, if a settlement agreement is reached through mediation by SFDRC, the parties may also apply for a speedy arbitration award by the Shenzhen International Arbitration Court, their governing unit, according to the contents of the settlement agreement, In order to make the contents of the settlement agreement with the force of law enforcement, to ensure that the dispute is completely resolved. 

Next, NEEQ and SFDRC will deepen cooperation, improve the working mechanism, and strengthen cooperation in the selection of mediators, business training, mediation information sharing, case studies, and media publicity. NEEQ will actively guide all kinds of market subjects to resolve disputes through mediation, reduce the cost of dispute resolution, and improve the efficiency of dispute resolution.