| Shenzhen Stock Exchange and Shanghai Stock Exchange were established in December 1990 and June 1991 respectively, which marked the beginning of the securities market of New China. In the past decades, securities market has played positive roles in the development of China's socialist market economy. However, due to problems incurred in the development of securities market, there emerged quite a lot of securities disputes, such as misrepresentation, insider trading, manipulating the stock price, and defrauding the clients etc.. And there still lacks a systematic, perfect and effective investors protection system, which seriously affect the healthy development of the securities market. Therefore, it's necessary to establish an effect and effective securities disputes settlement system in China.As a civil and commercial dispute, the securities dispute can be resolved through mediation, arbitration or litigation, etc.. In recent years, many scholars and officials proposed to introduce securities arbitration system in China according to the successful experience of foreign countries.In this paper, the author analyses the reasons of the emerging of securities arbitration system, discusses the importance of establishing and improving the system in China and proposes some solutions to the problems in establishing the system in China.The paper is composed of 3 sections. The first section analyses the advantages and disadvantages of various securities disputes solution system. Firstly, with the lawyers, exchanges, or other third parties' help, the parties can solve their conflicts through mediation, which is simply and economical, but ambiguous and cannot fully protect the legal rights of the injured party. The other means is arbitration. Lastly, litigation is available. Litigation is the last defense for just and fair, but it's costly, complicated and inefficient. Compared with the mediation and litigation, the arbitration is informal, flexible and enforceable. In view of this, more and more scholars and officials have realized that the establishment and development of the securities arbitration system in China is heavily urgent.The second section illustrates the legislation and practice of the securities arbitration system in U.S. American is looked upon as litigious, however, more than 90 percent lawsuits filed in the federal courts were resolved not through litigation, but through alternative disputes resolutions means. the securities arbitration system in U.S. was developed with the Exchanges. Experienced the court's view conversion from hostility to advocacy, a set of integrate and efficient securities arbitration system was built up in U.S.. Now securities arbitration is the dominating means to solve the securities disputes, and most securities cases are heard in the arbitration tribunals under the Self-Regulatory Organizations. The proceedings of arbitration of various tribunals are basically alike, which consist of application and acceptance, composition of the tribunal, hearing and award. Once the award is made, it has little chance to be modified or cancelled by the courts. In the proceedings, the arbitrator has great discretion over the disposal of the case, and the evidence rule is flexible. Many rules in securities arbitration proceeding in U.S. have their features and advantages, and can be used for reference when we establish and improve our country's securities arbitration system.In section three, the necessity of establishing and improving securities arbitration system in China is discussed and detailed measures are put forward. In recent several years, misrepresentation, manipulating the stock price, insider trading and defrauding the client were rampant and threatened the steady development of the stock market. Therefore it is urgent to establish a set of just, effective securities arbitration system in our country. During over ten years' development, a set of securities arbitration system consist of laws, decrees, regulations and rules has been built in our country.
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