On The Cooperation In Securities Regulation Between China And The United States

In the context of financial globalization, international cooperation in securities regulation will be of much benefits to the protection of the interests of investors, and maintenance the stability of capital markets. With regard to China and the United States, the occurrence of the global financial crisis has provided an opportunity for the cooperation in securities regulation between the two countries. However, cooperation in securities regulation is not only an economic issue but a political issue, and to some extent which represents firstly or preferentially a political issue. The factor of sovereignty politics can directly determine the success or failure of the cooperation in securities regulation. Therefore, during the discussion of the cooperation in securities regulation between China and the United States, we need to view this question from the different perspectives at the same time, such as economic system, legal system and the sovereignty politics:on the one hand, to analyze the challenges for the cooperation arising from economic system (global financial crisis) and sovereignty politics; on the other hand, to seek the coping strategies from legal system and the sovereignty politics. To meet the challenges at the sovereignty politics level is mainly based on the strategic level, whereas to meet the challenges at the legal system level is based on tactical level. Only if resolve the political problems between countries, the legal cooperation in the field of economy could obtain much more obvious effects.In addition, whereas the cooperation in securities regulation between China and the United States depends not only on the will of a single country, but also on the response of the other country, for China the advisable actions are:firstly, to seek positively the cooperation with the United States. These areas of cooperation include mainly the field of securities offering, securities trading, and securities clearing and settlement. Otherwise, the contents of the cooperation include mainly the fields of legislation, justice, and law enforcement; secondly, to cope with positively the challenges affecting the bilateral cooperation. These coping strategies include the aspects of sovereignty politics and legal system. At the same time, learning is also an effective means of cooperation.This article adheres to this thought of writing: What are the purposes of the Sino-US cooperation in securities regulation? Furthermore, what are the areas of the Sino-US cooperation in securities regulation? Furthermore, what are the forms of the Sino-US cooperation in securities regulation? Furthermore, what are the contents of the Sino-US cooperation in securities regulation? Furthermore, what are the challenges that Sino-US cooperation in securities regulation faces? Furthermore, how can we to cope with the challenges? Accordingly, apart from the introduction, the main body of this article includes the following sections:Part I:On the purposes of the cooperation in securities regulation between China and the United States. The purposes represent mainly the following four aspects, namely, the promotion of information disclosure, the prevention of financial fraud, the coordination of the conflicts of jurisdiction, and the fulfilment of judgement. In these four aspects, China and the United States could carry out effective cooperation in the levels of legislative, judicial and law enforcement:to perfect the laws and regulations which can promote the information disclosure and the prevention of financial fraud, so as to provide sufficient legislative authority for the protection of the interests of the investors and for the maintenance of the stability of the capital markets; to coordinate the conflicts of jurisdiction between the courts of China and the United States, so as to ensure the unlawful or illegal activities either impairing the interests of the investors such as financial fraud and insider trading or endangering the stability of capital markets, could be heard by the courts without delay, and the court decisions could be recognized and enforced in time; to carry out the information sharing and the investigation assistance, and so on.Partâ…¡:On the areas of the cooperation in securities regulation between China and the United States. The areas of the cooperation include mainly three aspects, namely, the area of securities offering, securities trading, and securities clearing and settlement.Partâ…¢:On the forms of the cooperation in securities regulation between China and the United States. The forms include two major types, namely, the form of global cooperation and the form of bilateral cooperation.Partâ…£:On the contents of the cooperation in securities regulation between China and the United States. The contents include three major fields, namely, the field of legislation, the field of justice, and the field of law enforcement. Only if the two countries carry out effective cooperation the purposes of the Sino-US cooperation may come true.Partâ…¤:On the challenges for the cooperation in securities regulation between China and the United States. The factors affecting the cooperation include mainly the factor of the global financial crisis and the factor of sovereignty politics. These two factors will affect the cooperation positively and/or negatively at the same time. First, on the global financial crisis. The occurrence of the global financial crisis has provided an opportunity for the cooperation between China and the United States. The fact that the U.S. subprime mortgage crisis has triggered the global financial crisis makes it clear that the regulatory mechanism of the United States is still imperfect, therefore the United States will also commit itself to seeking improvements. Moreover, since the domestic financial crisis in the United States has triggered the global financial crisis, the United States would keep a low profile and in pursuit of cooperation with other countries; Second, on the sovereignty politics. Although the global financial crisis provides an opportunity for strengthening the cooperation in securities regulation between the two countries and even the cooperation at the international level, the development (or not) of the cooperation and the effects of the cooperation depend on the development of the bilateral political relations between China and U.S., and even the development of North-South cooperation in a higher level. The factor of sovereignty politics can start up or break off at any time the process of cooperation in securities regulation, even though the cooperation is not only necessary but feasible as well. In a word, China should actively seek cooperation with the United States; meanwhile, China also should make preparations for the poor development of the cooperation with the United States.Partâ…¥:On the coping strategies for the challenges. The coping strategies can be divided into two aspects:First, sovereignty politics aspect. Sovereignty politics is the decisive factor which affects the Sino-US cooperation in securities regulation. Therefore, we have to take measures at the level of sovereignty politics to cope with the negative impacts resulting from the factor of sovereignty politics. If China and the United States can maintain stable bilateral relations at the level of politics, which will benefit the cooperation in securities regulation and even the cooperation in regulation of the whole capital market, and vice versa. So China should keep a high profile at the level of sovereignty politics, while trying to seek effective cooperation between the two countries, China should also make preparations for the hard development, or at least in a short time the hard development of the cooperation between the two countries; thereby, China should take necessary measures at the level of sovereignty politics to safeguard the national financial security, in the meantime, to promote the reform of the international monetary system; Second, legal system aspect. The coping strategies at the level of legal system include three major parts:(1)on the perfection of the domestic laws and regulations. China can effectively regulate both the domestic capital markets and the foreign capital and financial institutions as well by virtue of the perfection of the domestic laws and regulations; (2)on the perfection of domestic judicial process. China can effectively both protect the interests of the domestic and foreign investors and regulate the activities of the foreign financial institutions impairing the stability of China capital markets through the perfection of the domestic judicial process. The perfection of domestic judicial process mainly refers to perfecting the proceedings with respect to profecting the interests of the investors, which aims to provide valid judicial remedy for the investors whose interests are damaged; (3) on the participation in the enactment of relevant international norms. At the macro level of international monetary system and international financial regulation, China can effectively confront the hegemony of western countries on the international monetary system by means of participating in the enactment of relevant international norms, so as to protect the interests of domestic investors, to safeguard the stability of the domestic capital markets and further the national financial security, and still to increase the bonus that the principal parts in China capital market legally obtain in international mechanism.