Research On Regulations Of Actual Controllers Of Listed Companies

The capital market is an important part of China’s social market economy,and listed companies are the cornerstone of the capital market.It is common that China’s listed companies have actual controllers,due to factors including the special historical background of China’s listed companies,the centralized shareholding structure of most listed companies,and the listed company’s sponsors trying to protect their own interests by evading supervision.The actual controller is the key to the governance of listed companies,and has important responsibilities in steadily advancing the reform of the registration system,comprehensively improving the quality of listed companies,protecting the legitimate rights and interests of small and medium investors,facilitating the healthy development of the capital market,and better preventing and resolving systemic risks in the capital market.With the development of the rule of law in the capital market and the continuing exploration in practice by regulatory agencies and judicial organs,China has initially established a legal regulation system for the actual controllers of listed companies.In recent years,under the background of profound changes in the economic environment and the deepening of the reform and opening up of the capital market,the illegal acts of the actual controllers of some listed companies have become increasingly serious,and there have been many case let alone the strict regulations,and a new trend of concealment and complexity has emerged.The illegal behavior of the actual controller of a listed company has harmed the interests of listed companies,seriously damaged the legitimate rights and interests of public investors,undermined the principle of “fair,equitable and transparent” of the capital market,seriously disrupted the operation order of the capital market,and even affected social harmony and stability.These situations show that the legislation of actual controllers of listed companies are not perfect,and the regulations and the judicial systems need to be further strengthened.The issuance of securities is about to fully implement the registration system,which will strengthen regulations on the actual controllers of listed companies,and is of great significance to building a standardized,transparent,open,dynamic and resilient capital market.The Securities Law(2019 Edition)expands the scope of responsibilities of actual controllers,and imposes strict regulations on fraudulent issuance,information disclosure,restricted-period transactions,public commitments,advance compensation,and shareholder representative litigation,which greatly increases the cost of illegality and enhances the liabilities of actual controllers.Amendment(XI)to the Criminal Law also has some connections with the Securities Law(2019 Edition)which includes actual controllers of listed companies in its scope for the crime of fraudulent issuance of stocks and bonds,and the crime of illegal disclosure and non-disclosure of important information.In the first half of 2021,the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council issued the “Opinions on Strictly Combating Securities Illegal Activities in accordance with the Law”,requiring greater accountability for the “key minority” securities violations of listed companies such as actual controllers.In order to implement the major decisions and deployments of the Central Committee of the Communist Party and the State Council,and maintain the order of the capital market and the rights and interests of public investors,regulatory authorities and judicial departments should improve the efficiency of enforcement on securities transactions,effectively regulate the relevant behaviors of the actual controllers of listed companies,and continuingly facilitate the high-quality development of the capital market and ensure that investors can equally enjoy the achievement of reform and opening up and the development of the capital market.The research topic of this thesis is the regulation of the actual controllers of listed companies in China,adheres to the concept of “thinking from practice” and to the principle of question orientation,and follows the approach of “investigating the status quo,discovering problems,analyzing problems,and solving problems”.Based on the status quo of actual controllers of listed companies,this thesis summarizes and analyzes the outstanding problems in the regulation of the actual controllers of listed companies,and then conducts in-depth discussions from the perspectives of legislation,regulation and judicial systems,and aims to propose targeted solutions.The content of this thesis is divided into six parts,including the introduction and the first to fifth chapters.The introduction includes clarification of the research background,topic,research significance,research approach,research methods and possible innovations of this thesis and the literature review.The first chapter studies the practical basis and theoretical basis of the regulation of actual controllers of the listed company,systematically sort out the relevant provisions on actual controllers of listed companies in the current legal system,summarize the overall status and historical causes of actual controllers of listed companies,and analyze the important influence of actual controllers of listed companies on listed companies and the capital market.The theoretical basis of the regulation on actual controllers of listed companies is studied from the perspectives of economics and law.The second chapter adheres to the problem orientation and analyzes the main problems existing in the regulation of actual controllers of listed companies from three perspectives:legislation,regulatory rules and judicial systems.In terms of legislation,there are differences in the definition of actual controllers of a listed company,the criteria for determination are not clear enough,the fiduciary duty of the actual controller of a listed company is not stipulated at the legislation level,and the actual controller of a listed company has not been included in the scope of supervision by the China Securities Regulatory Committee(“CSRC”).In the field of supervision and regulation,the illegal acts of the actual controllers of listed companies have been repeatedly prohibited,and the effectiveness of enforcement of actual controllers of listed companies is insufficient.In terms of judicial systems,there are certain difficulties in the investigation of criminal liability and civil liability of the actual controller of a listed company.In the next three chapters,these questions will be answered.The third chapter studies the legislation of actual controllers of listed companies.This thesis attempts to propose a feasible path for the reconstruction of the definition of the actual controller of a listed company,summarizes the criteria for identifying the actual controller of a listed company based on the two perspectives of the subject’s identity and the ownership of actual control,and proposes to include the actual controller of a listed company in the scope of supervision of the CSRC.The fourth chapter discusses the supervision and regulation of actual controllers of listed companies.In the practice of the capital market,the actual controller of a listed company is usually the leader of the listed company,and the internal control system of a listed company has limited restrictions on the actual controller.It is necessary to use the power of the government to strengthen the external supervision of the actual controller of a listed company.This chapter analyzes the typical illegal behaviors of the actual controllers of listed companies,mainly including information disclosure violations and market manipulation behaviors,summarizes the types and patterns of each illegal behaviors,discusses the difficulties of supervision and regulation,and proposes targeted solutions as to optimizing the supervision mechanism.The fifth chapter discusses the judicial systems relating to actual controllers of listed companies.If the actual controller of a listed company engages in illegal acts,the possible liabilities include administrative liability,criminal liability and civil liability.This chapter studies the criminal liability and civil liability of actual controllers of listed companies,analyzes the problems existing in judicial systems and tries to put forward suggestions for improvement,and accelerates the construction of a coordinated and multi-level system with administrative law enforcement,civil recovery,and criminal punishment for actual controllers of listed companies.