[Basic Facts]
In November 2011, Huifeng Company initiated One for Art International Cultural Artifacts Trading Platform. GAN, X opened five membership accounts of said Trading Platform through Hong Kong Wanfeng Trading Platform Agency in order to make artifacts share transaction. During the period of December 2015 through January 2016, Huifeng Company froze GAN, X’s capital on Hong Kong Wanfeng Trading Platform out of such reasons as business adjustment and other reasons. GAN, X requested the return of his capital for multiple times but failed to recover his capital and thus he sued Huifeng Company to the court for ruling return of the frozen settlement fund stored in Hong Kong Wanfeng Trading Platform, which totals over HKD200,000.
[Rulings]
The court rules as follows: artifacts share trading means separating the subject matter into shares of equal value and issuing such shares on the market for public offering based on their ownership, which may be subscribed and possessed by investors as original shares and then be traded on the cultural artifacts trading platform. Artifacts share transaction is a financialization attempt of artifacts trading in the category of financial derivative instrument innovation and exploration and, as an emerging item of the financial and artifacts market is not specifically stipulated by the existing laws and regulations. The currently effective securities law defines securities as stock, bond and other varieties of securities as recognized by the state council according to law. Artifacts share is an innovated product of financial and derivative instrument and an explored and attempted instrument of asset securitization. However, securitization is not equivalent to securities and thus the artifacts share transaction is not governed by the adjusted provisions of securities law. In comprehensive consideration of the foregoing, the court holds that trading is the pronoun of purchase and selling and should be judged pursuant to the Contract Law of the People’s Republic of China and the relevant judicial interpretations, for which the court rules Huifeng Company’s returning the relevant funds to GAN, X.
[Typical Significance]
In recent years, taking advantages of the heightened economic strength and rich cultural heritage, China has gradually become a cultural artifacts trading market attracting much attention from the globe. Meanwhile, as China’s financial market develops rapidly, a reforming exploration combining the cultural industry and the features of finance industry sprout in the field of artifacts trading. stirring up an artifacts trading heat for a time. Shenzhen and Shanghai becomes the national cultural property exchange pilot cities. Qianhai Shekou Free Trade Zone is a window into Chinese financial industry’s opening up demonstration, in which, according to statistics, financial and financial-like enterprises account for 52% of all the enterprises. Financial cases account for 31.87% of all the cases accepted by Qianhai Court. The cause of action of this case is a new type, whose typical significance lies in the combination of financial transaction, online trading and artifacts trading, specifically described as follows: a. the whole process of transaction is made on the Internet, b. the trading has the evident features of securitization transactionsuch as standardized separation, public offering and consecutive transaction, c. the object of transaction is shares of Dzi beads, antique jades and other artifacts. We can conclude from the judgment of this case that in the field of financial industry innovation and exploration, artifacts trading platform should be guided to be set up in accordance with the law, operated in compliance with the standard and to protect the investors’ legitimate interests.
