Viewpoint | Legal Analysis of the Validity of Commercial Bank Equity Proxy Holding Behavior and Whether It Can Be Excluded from Enforcement

Article 24 of the Supreme People's Court's Provisions on the Application of the Company Law of the People's Republic of China (III) (2020 Amendment):

If the actual investor and the nominal investor of a limited liability company enter into a contract, agreeing that the actual investor shall contribute capital and enjoy investment rights, and the nominal investor shall be the nominal shareholder, and a dispute arises between the actual investor and the nominal shareholder regarding the validity of the contract, the people's court shall, unless there are legally invalid circumstances, deem the contract valid.

Article 12 of the Provisional Measures on the Management of Equity in Commercial Banks:

Shareholders of commercial banks shall not entrust others or accept entrustment from others to hold equity in commercial banks.

Major shareholders of commercial banks shall explain their equity structure layer by layer until the actual controller and ultimate beneficiary, as well as their relationship with other shareholders or concerted action.

Article 153 of the Civil Code:

Civil acts that violate the mandatory provisions of laws and administrative regulations are invalid. However, this does not apply if the mandatory provision does not invalidate the civil act. Civil acts that violate public order and good customs are invalid.

Article 31 of the Supreme People's Court's Notice on Issuing the Minutes of the National Court's Civil and Commercial Trial Work Conference:

Validity of Contracts Violating Regulations: Generally, violation of regulations does not affect the validity of a contract. However, if the content of the regulation involves financial security, market order, national macroeconomic policies, or public order and good customs, the contract should be deemed invalid. When determining whether a regulation involves public order and good customs, the people's court should carefully consider the regulatory intensity, protection of transaction security, and social impact based on the examination of the regulated object, and provide sufficient reasoning in the judgment document.

Supreme People's Court's Provisions on Several Issues Concerning the Handling of Execution Objections and Reconsideration Cases by People's Courts (2020 Amendment)

▶ Article 25:

Regarding objections from third parties, the people's court shall determine whether they are rights holders according to the following standards:

(IV) Equity shall be judged according to the information registered by the administrative licensing authority and publicized in the enterprise credit information disclosure system;

(V) For other properties and rights, if registered, they shall be judged according to the registration of the registration authority; if not registered, they shall be judged according to the evidence such as contracts proving the ownership of the property or the rights holder.

▶ Article 26:

In the execution of monetary claims, if a third party raises an objection to execution based on an effective legal document made before the execution subject was seized, attached, or frozen, the people's court shall handle it according to the following circumstances:

(I) If the legal document is a judgment or arbitration award on ownership disputes between the third party and the debtor, or on contract disputes such as lease, borrowing, or custody that do not involve the transfer of property ownership, and the judgment or arbitration award determines that the execution subject belongs to the third party or should be returned to the third party, and the rights of the third party can exclude execution, it shall be supported;

(II) If the legal document is a judgment or arbitration award on debt disputes between the third party and the debtor other than those listed in the preceding item, and the judgment or arbitration award determines that the execution subject belongs to the third party or should be delivered or returned to the third party, it shall not be supported.

(III) If the legal document is an auction or sale decision or a debt offset decision in which the third party accepts the execution subject, and its rights can exclude execution, it shall be supported.

In the execution of monetary claims, if a third party raises an objection to execution based on an effective legal document made after the execution subject was seized, attached, or frozen, the people's court shall not support it.

In the execution of non-monetary claims, if a third party raises an objection to execution based on an effective legal document, and the legal document makes a different determination on the ownership of the execution subject, the people's court shall inform the third party to apply for retrial or resolve the issue through other procedures.

If the applicant for execution or a third party is dissatisfied with the ruling made by the people's court in accordance with the provisions of paragraphs 1 and 2 of this article, it may file an action for objection to execution 。

1. Basic Facts:

A Rural Cooperative Bank underwent a major shareholding reform in 2004, transforming from A Rural Credit Cooperative to A Rural Cooperative Bank. During the reform, it publicly raised funds from the public, divided into corporate shares and individual shares according to investor type. The two types of shares were dividend tax Tax deductions differed. On June 12, 2004, the plaintiff invested 10,000 yuan in original qualified share capital and 40,000 yuan in original investment share capital in A Rural Cooperative Bank, held by the B machinery factory he operated. After that, through multiple share grants from A Rural Cooperative Bank, and on May 9, 2013, the plaintiff invested another 17,920 yuan to purchase additional shares. As of April 15, 2022, B machinery factory held a total of 333,133 shares of A Rural Cooperative Bank. In February 2007, a third party purchased the factory building of B machinery factory. Through tax planning, the third party received the factory building through equity transfer. However, the equipment, materials of the original B machinery factory, and the aforementioned shares of A Rural Cooperative Bank under the plaintiff's name were not included in the factory transfer. The equipment and materials were removed by the original shareholders. Because the type of shares held on behalf of others was corporate shares, the transfer of accounts was inconvenient, and because the value was not high at that time, and there was no conflict of interest between the two parties, the shares continued to be held by B machinery factory. After B machinery factory received the bank dividends, it was transferred to the plaintiff. From 2007 to the first half of 2015, the defendant transferred the share dividends to the plaintiff in a timely manner every year, and there was no dispute between the two parties. During this period, on May 9, 2013, the plaintiff invested another 17,920 yuan to increase the share capital and purchase additional shares. However, unforeseen circumstances occurred. During 2014, the defendant was implicated by other companies due to joint guarantees, and the aforementioned share dividend payments were frozen during the court proceedings. On February 27, 2023, Ruian People's Court ruled to accept the bankruptcy liquidation application of China Minsheng Bank, Wenzhou Branch, against the defendant, and appointed C Law Firm as the bankruptcy administrator. Later, a dispute arose between the plaintiff and the defendant, and the plaintiff sued the court, requesting that the shares held by the defendant B machinery factory on behalf of the plaintiff, with share certificate number 000252766 and account number xxx, and the 109,171.63 yuan dividend in the account be retrieved by the plaintiff.

2. Key points of the judgment:

The plaintiff cannot exercise the right to retrieve the dividend corresponding to the shares involved in the case, for the following reasons: First, the entrusted holding agreement for commercial bank equity should not be affirmed, A Rural Commercial Bank Co., Ltd. is a commercial bank, and the entrusted holding of commercial bank equity is regulated by separate departmental regulations. The "Interim Measures for the Management of Commercial Bank Equity" [No. 1 of 2018], promulgated by the CBRC on January 5, 2018, explicitly negates the entrusted holding of commercial bank equity. Article 10 of the Measures stipulates: "Commercial bank shareholders shall strictly fulfill their capital contribution obligations in accordance with laws, regulations and CBRC regulations. Commercial bank shareholders shall use their own funds to invest in commercial banks, and ensure that the source of funds is legal, and shall not invest with entrusted funds, debt funds or other non-self-owned funds, except as otherwise provided by laws and regulations." Article 12 stipulates: "Commercial bank shareholders shall not entrust others or accept entrustment from others to hold commercial bank equity." Although this provision is a departmental regulation, it clearly holds a negative attitude towards the entrusted holding of commercial bank equity, requiring commercial bank shareholders not to entrust others or accept entrustment from others to hold commercial bank equity. If the actual investor is easily protected in external relations, it will send an inappropriate signal, leading to a sharp increase in abnormal corporate shareholding phenomena, increasing transaction costs, and being detrimental to transaction security. If the right of the actual investor to exclude execution is generally recognized, it will make the equity holding agreement a tool for evading execution and obligations in practice, leading to a situation where the debtor cannot be executed whether the actual investor or the nominal holder of the equity, and the holding shares may become a way to evade supervision and control, allowing the actual investor to evade the responsibilities they should bear. Therefore, the people's courts should not affirm or support the entrusted holding of commercial bank equity. Second, the plaintiff's rights are not superior to those of all creditors, The plaintiff has not obtained the shareholder status of the shares involved in the case and has no legal basis to claim shareholder qualifications. According to Article 32 of the Company Law, the shareholders registered in accordance with the law have public notice effect externally. In the external relations of the company, the actual investor does not have the legal status and public notice effect of a shareholder. Article 24 of the Supreme People's Court's Several Provisions on the Application of the Company Law of the People's Republic of China (III) stipulates: "If the actual investor and the nominal investor of a limited liability company enter into a contract, agreeing that the actual investor shall contribute capital and enjoy investment rights, and the nominal investor shall be the nominal shareholder, and a dispute arises between the actual investor and the nominal shareholder regarding the validity of the contract, if there is no situation as stipulated in Article 52 of the Contract Law, the people's court shall determine that the contract is valid. In the case of a dispute over the ownership of investment rights between the actual investor and the nominal shareholder as stipulated in the preceding paragraph, if the actual investor claims rights from the nominal shareholder on the grounds that he has actually fulfilled his capital contribution obligations, the people's court shall support it. If the nominal shareholder denies the rights of the actual investor on the grounds that the company's shareholder register and the company registration authority's registration, the people's court shall not support it. If the actual investor requests the company to change the shareholder, issue a capital contribution certificate, record it in the shareholder register, record it in the company's articles of association, and handle the registration with the company registration authority without the consent of more than half of the other shareholders of the company, the people's court shall not support it." Although the above legal provisions and judicial interpretations are aimed at limited liability companies, in this case, A Rural Commercial Bank Co., Ltd. is a closed-end share company, and the above legal provisions and judicial interpretations can be referred to. Even if the plaintiff can enjoy the rights of a shareholder based on the equity holding relationship, it does not therefore enjoy the status of a shareholder. To obtain shareholder status, certain conditions must still be met. The rights enjoyed by the plaintiff based on the equity holding relationship against the nominal shareholder, defendant B machinery factory, belong to the category of claims in nature, essentially a creditor's right, and its rights cannot be prioritized over the rights of all creditors. According to Article 24 of the above-mentioned judicial interpretation III of the Company Law, disputes between the actual investor and the nominal shareholder are resolved through contract mechanisms. Therefore, the equity holding relationship between the actual investor and the nominal shareholder is essentially still a creditor-debtor relationship. The actual investor obtains actual rights based on the equity holding agreement, which is obtained based on the contractual relationship, not based on the provisions of the Company Law and relevant judicial interpretations. Now that the defendant B machinery factory has entered bankruptcy liquidation proceedings, the plaintiff cannot use its holding relationship with the defendant to oppose all creditors. Third, from the perspective of trust interests, the trust interests of creditors in bankruptcy proceedings should be protected. Commercial law has the principle of public notice and the principle of appearance. The external effect of company public notice has a certain mandatory nature. Article 32 of the Company Law clearly stipulates that the company shall register the name or name and capital contribution amount of the shareholder with the company registration authority. If the registered matters are changed, the registration shall be changed. If the registration or change of registration is not completed, it shall not be opposed to a third party. The shareholders registered in accordance with the law have public notice effect externally. Creditors have trust interests in the property under the name of B machinery factory. The risk of equity holding should not be borne by the creditors. Creditors can only judge the property of the nominal shareholder through external information. Equity information is obtainable, but the holding relationship is unknown, which is a risk that creditors cannot foresee. Creditors cannot be required to fulfill this inquiry obligation. Risk sharing should be tilted towards protecting creditors. In addition, since the actual investor chooses to remain anonymous, there are commercial interests to consider. Since the actual investor has obtained commercial benefits through the holding relationship, or benefits that cannot be obtained in the case of explicit names, they must also bear the inherent risks of this holding. In summary, the plaintiff cannot obtain the shares involved in the case based on the holding fact, nor can they obtain the dividends corresponding to the shares involved in the case based on this fact. They can only claim the creditor's rights corresponding to the contractual rights based on the holding fact, that is, seek relief by reporting claims to the bankruptcy administrator. Accordingly, in accordance with the provisions of Article 32, paragraph 3 of the Company Law of the People's Republic of China, the judgment is as follows: The plaintiff's lawsuit is dismissed.

1. Basic Case Facts:

On June 28, 2010, A Group and B Company signed an "Entrusted Investment and Shareholding Agency Agreement". The agreement stipulated that A Group voluntarily entrusted B Company to act as A Group's agent for capital contribution and shareholding in Yingkou Coastal Bank and to exercise relevant shareholder rights on its behalf. B Company voluntarily accepted A Group's entrustment to exercise the agency rights of the nominee shareholder. The entrustment period was three years, during which A Group should pay B Company RMB 1 million as a nominee shareholding fee. On June 27, 2013, A Group and B Company signed a "Supplementary Agreement to the Entrusted Investment and Shareholding Agency Agreement", under which B Company continued to hold 72 million shares of Yingkou Coastal Bank on behalf of A Group. The entrustment period was three years, from June 29, 2013, to June 28, 2016. The agency fee was RMB 1 million. B Company committed that if the nominee-held assets were subjected to compulsory measures such as seizure or freezing by judicial organs or other authorized institutions during the entrustment period, B Company should actively cooperate with A Group in submitting applications or appeals to the court or other authorized institutions to lift such compulsory measures. If the measures could not be lifted, B Company should provide other assets to the court to ensure the lifting of the compulsory measures on the nominee-held assets, otherwise, if A Group suffered losses, A Group had the right to seek recovery from B Company. Subsequently, D Bank, due to a loan contract dispute with B Company, seized the 72 million shares of Yingkou Coastal Bank held by B Company and the undistributed dividends. A Group filed an objection to execution lawsuit demanding the cessation of the enforcement on the equity.

2. Court's View

First, an analysis of the nature of the internal nominee shareholding legal relationship between the actual contributor and the nominal shareholder. The nominee shareholding legal relationship is essentially a creditor-debtor relationship, constrained by the principle of relativity of contract law. The undisclosed shareholder can only assert this claim against the nominal shareholder and it does not affect third parties other than the contracting parties. From the provisions of Article 32 of the Company Law, a company shall register the names or titles of its shareholders and their capital contributions with the company registration authority. If the registered particulars change, the registration shall be changed. Unless registered or changed, it shall not be asserted against third parties. The registered particulars of a company's shareholders are mainly reflected in three documents: the articles of association, the shareholder register, and the industrial and commercial registration. In this case, in the articles of association, shareholder register, and industrial and commercial registration documents of Yingkou Coastal Bank, the shares in question are all registered under the name of B Company. B Company can assert and exercise shareholder rights based on this. In external relations of the company, the nominal shareholder has the legal status of a shareholder, and the undisclosed shareholder cannot use their agreement with the nominal shareholder to oppose the legitimate rights of external creditors against the nominal shareholder. Article 24 of the Judicial Interpretation (III) of the Company Law further elaborates on this: "If the actual capital contributor and the nominal capital contributor of a limited liability company enter into a contract stipulating that the actual capital contributor makes the investment and enjoys the investment rights and interests, and the nominal capital contributor acts as the nominal shareholder, and there is a dispute between the actual capital contributor and the nominal shareholder regarding the validity of the contract, if there are no circumstances stipulated in Article 52 of the Contract Law, the People's Court shall deem the contract valid. If the actual capital contributor and the nominal shareholder specified in the preceding paragraph have a dispute over the ownership of investment rights and interests, and the actual capital contributor asserts rights on the ground that they have actually fulfilled their capital contribution obligations, the People's Court shall support it. If the nominal shareholder denies the rights of the actual capital contributor on the ground of the company's shareholder register record or the company registration authority's registration, the People's Court shall not support it. If the actual capital contributor requests the company to change shareholders, issue capital contribution certificates, record in the shareholder register, record in the articles of association, and handle registration with the company registration authority without the consent of more than half of the company's other shareholders, the People's Court shall not support it." Although the above laws and judicial interpretations are aimed at limited liability companies, Yingkou Coastal Bank in this case is an unlisted stock company, and it is not inappropriate to refer to the above legal provisions to handle related legal relationships in terms of their nature. From the above legal basis, in nominee situations, i.e., when the nominal shareholder and the actual shareholder are separated, it is resolved through contract law regulation. Even if A Group is the actual capital contributor of the shares in question, it does not automatically acquire the shareholder status of Yingkou Coastal Bank. In nominee situations, the property interests of the undisclosed shareholder are transferred from the nominal shareholder to the actual shareholder through a contract and are obtained through contractual claims. If the undisclosed shareholder requests to become a company shareholder, the consent of more than half of the shareholders is required, and they do not automatically acquire shareholder status. Combining the above analysis, it can be seen that even if A Group genuinely contributed capital to the shares in question, the property rights and interests thus formed are essentially a claim that A Group has against B Company. If B Company breaches the entrusted agreement signed with A Group, A Group may assert breach of contract liability against B Company based on the relevant agreements signed by both parties, and does not automatically have ownership of the shares in question or enjoy shareholder status.

Second, from the perspective of Protection of Reliance Interest analysis. According to the principle of apparent authority in commercial law, the effect of a transactional act is determined by the outward appearance of the actions of the transacting parties. Even if the external representation is inconsistent with the internal facts, the commercial entity must still be bound by this outward appearance, and the outward appearance takes precedence over the internal facts. Once a statutory matter is registered, it generates public credibility, and the registered particulars are presumed to be true, accurate, and valid. Acts performed by a bona fide third party based on reliance on the registration are protected by law. Even if the registered particulars are untrue or inconsistent with the third party's reliance, the bona fide third party can still assert rights according to the records in the register. As long as the third party's reliance is reasonable, the third party's reliance interest should receive priority protection under the law. On the other hand, when a creditor and a judgment debtor engage in a transaction in an enforcement case, there is also the issue of protection of reliance interest. When a transaction occurs, the judgment creditor assesses the overall financial capacity of the judgment debtor before engaging in the transaction. After the judgment debtor fails to fulfill the obligations determined by an effective legal document and enters the compulsory enforcement procedure, all assets under the name of the judgment debtor serve as general liability assets and overall security for external debts. Therefore, it cannot be assumed that there is no issue of protection of reliance interest for the judgment creditor in the compulsory enforcement procedure. In particular, the law explicitly prohibits over-seizure. To realize the seizure of a specific property, the judgment creditor must forgo the seizure of other properties. If the interest in such seizure is not protected, it would be unfair to the judgment creditor. Therefore, it cannot be demanded that the judgment debtor's creditor and the nominal shareholder must engage in civil legal acts specifically concerning the nominee-held equity registered under the nominal shareholder's name for the bona fide third-party system to apply. When the actual capital contributor of the shares in question is inconsistent with the publicly displayed nominal shareholder, the law should not only prioritize the protection of bona fide third parties who rely on the public disclosure and transact with the nominal shareholder, but also prioritize the rights of the nominal shareholder's creditors. In this case, CITIC Jinan Branch has a reliance interest in applying for compulsory enforcement of the shares in question and should be given priority protection.

Third, from the perspective of rights, responsibilities, and interest distribution between creditors and undisclosed shareholders. First, creditors can only judge the assets of nominal shareholders through external information obtained from equity information inquiries. However, the agency relationship is difficult to ascertain and constitutes a risk unforeseen by the creditor. It is unreasonable to demand that creditors fulfill this inquiry obligation. Risk sharing should be tilted towards protecting creditors, and the operation of this system will result in lower social costs. Second, the actual investor's rights have corresponding legal remedies. Even if the equity held by the nominal shareholder is subject to court-ordered enforcement, the undisclosed shareholder can still request compensation for their losses from the nominal shareholder based on the agreement between them and the principles of trust and agency. Third, the enforcement of the shares involved did not exceed the psychological expectations of the actual investor. Before the actual investor is publicly named as a shareholder, their psychological expectation or anticipated benefit is merely to obtain contractual rights, not protection under company law. In this case, A Group and B Company made a special agreement in the relevant agency agreement regarding the possibility of the held shares being subject to enforcement measures. Finally, from the perspective of risk and benefit consistency, the actual investor chooses to remain anonymous due to commercial considerations. Since they have obtained benefits through the agency relationship, or other benefits that cannot be obtained when publicly named, they must also bear the inherent risks associated with this agency relationship and any potential disadvantages. Therefore, it is more fair and reasonable for A Group to bear the risks and disadvantages arising from choosing the agency relationship.

Fourth, from the perspective of judicial policy value orientation. In reality, shareholding agency relationships arise for various reasons. However, from the perspective of maintaining transaction security and reducing transaction costs, if the focus is on recognizing and protecting the rights of undisclosed shareholders, thereby preventing enforcement, it will objectively encourage the use of shareholding agency to avoid debt and evade supervision, increasing social management costs. In this case, when A Group and B Company signed the agreement, the Office of the China Banking Regulatory Commission (CBRC) had already issued the "Notice on Strengthening the Qualification Review of Major Shareholders of Small and Medium-sized Commercial Banks" (Yin Jian Ban Fa [2010] No. 115), which stipulates in Article 2, Item 2 that "the equity held by major shareholders, including strategic investors, generally should not exceed 20%. For commercial banks in some high-risk cities, the proportion can be appropriately relaxed." Among the shareholders of Yingkou Coastal Bank, HNA Hotel Holding Group Co., Ltd., as a subsidiary of A Group, already holds 20% of the shares. Through B Company's shareholding agency, A Group's shareholding ratio in Yingkou Coastal Bank reached 24.8%. A Group's seeking B Company to hold shares in Yingkou Coastal Bank may be to avoid the regulatory requirements for shareholder qualification review in the above-mentioned notice. In addition, the "Interim Measures for the Management of Commercial Bank Equity" [2018 No. 1] issued by the CBRC on January 5, 2018, explicitly negates the behavior of shareholding agency in commercial banks. Article 12 of the Measures stipulates: "Commercial bank shareholders shall not entrust others or accept entrustment from others to hold commercial bank equity." Although this provision is a departmental regulation, a comprehensive analysis of the regulatory purpose, content, and potential harmful consequences of allowing shareholding agency in commercial banks shows a trend of increasingly strict and negative regulation of shareholding agency in commercial banks. In order to maintain transaction security and to force undisclosed shareholders to be more cautious when choosing nominal shareholders, a judgment that the actual investor A Group cannot resist the court's enforcement of the shares involved is conducive to regulating the legal relationship of commercial bank equity and preventing actual investors from illegally entrusting others to hold shares or circumventing the law.

According to Article 12 of the "Interim Measures for the Management of Commercial Bank Equity," commercial bank shareholders shall not entrust others or accept entrustment from others to hold commercial bank equity. That is, the "Interim Measures for the Management of Commercial Bank Equity" holds a negative opinion on shareholding agency in commercial banks. Although the nature of this measure is a departmental regulation, according to Article 31 of the "Meeting Minutes," regulations involving financial security, market order, national macroeconomic policies, and public order and good customs should be deemed invalid. The act of commercial bank shareholders holding shares through agency may allow undisclosed shareholders to escape supervision, affecting the operation of commercial banks and the interests of depositors. This agency behavior involves financial security, and according to the above legal provisions, it should be deemed invalid. At the same time, according to the relevant cases retrieved by the author, including Case 1, most courts currently hold a negative opinion on the behavior of shareholding agency in commercial banks.

First, from the perspective of the invalidity of shareholding agency: As mentioned above, shareholding agency in commercial banks has the risk of being deemed invalid. If the shareholding agency is invalid, the ownership of the shares involved still belongs to the nominal holder, and the actual investor naturally cannot exclude enforcement of the shares involved.

Second, from the perspective of the actual investor having obtained an effective legal document confirming the equity rights: If the actual investor has obtained an effective legal document confirming the title to the shares involved, according to Article 26, Paragraph 2 of the "Several Provisions on the Review of Execution Objections," "In the execution of monetary claims, if a third party raises an objection to exclude execution based on an effective legal document made after the execution target is seized, attached, or frozen, the people's court shall not support it. If the effective legal document confirming the title to the shares involved is made after the shares are seized and frozen, execution cannot be excluded."

Third, from the nature of shareholding agency: Article 24 of the Supreme People's Court's "Several Provisions on the Application of the Company Law of the People's Republic of China (III)" stipulates that in a shareholding agency relationship, if the actual investor, without the consent of more than half of the other shareholders, requests the company to change the shareholder, issue a capital contribution certificate, record it in the shareholder register, record it in the company's articles of association, and complete the registration with the company registration authority, the people's court shall not support it. According to the above legal provisions, in a shareholding agency relationship, if the actual investor wants to obtain the status of a shareholder, they must obtain the consent of more than half of the other shareholders. This legal provision indirectly reflects that the legal relationship of shareholding agency is not equivalent to the actual investor obtaining the status of a shareholder. The shareholding agency relationship between the actual investor and the nominal holder is a creditor-debtor relationship, and the actual investor cannot use this to resist the execution of the shares involved.

Fourth, from the perspective of protecting the trust interests of third parties: Article 32 of the Company Law stipulates that the name of a company shareholder shall not be used to oppose a third party if it is not registered. Article 25, Paragraph 1, Item 4 of the "Several Provisions on the Review of Execution Objections" stipulates that for objections from third parties, the equity shall be confirmed as belonging to the rights holder according to the registration information of the administrative authority for industry and commerce. According to the principle of commercial appearance, the name of a shareholder that is not registered cannot be used to oppose a third party. The shareholding agency behavior between the actual investor and the nominal holder is secretive. To protect the trust interests of third parties, the ownership of the equity should be determined based on the registered rights holder. The rights of the actual investor to the shares involved cannot be used to oppose a third party. According to Case 2, the Supreme People's Court also holds an affirmative opinion on the issue of protecting the trust interests of the applicant for enforcement in the enforcement procedure. As the rights holder, the applicant for enforcement, whether the shares can be auctioned after being seized, and whether the seizure of the debtor's property exceeds the standard, when weighing which property to give up, the appearance of the registered equity will affect the rights of the applicant for enforcement. Therefore, in this situation, the applicant for enforcement also has the issue of protecting trust interests.

The above are personal opinions and are for learning and exchange purposes only. The specific determination of relevant cases should be based on the court's judgment.