Study On Legal Issues Of Securities Investor Protection Fund

Securities investor protection fund, an important part in the investors'protection system, is a securities investor transaction protection system in essence. It emphasizes on the compensation after the event and gives the attention to the prevention beforehand at the same time. It has the characteristics of securities dealers'insurance system and can be regarded as trust properties as well. The basic purposes of Chinese securities investor protection fund are to ensure investors'confidences and maintain the certainty of securities market. The basic functions of it are rising and managing funds and which ensure the compensation system and handle the risk supervision. Besides, securities investor protection fund of China should carry out the functions as protecting the lawful interests of investors and educating investors in the future.The source of the fund is a fundamental issue. Nowadays, in China, the protection fund system is short of a united and delicate paying standard. It is suggested that sensible management, risk control, the situation of debts and the ability to gaining profit should be synthetically considered according the different risk levels of different companies. As to the scale of it, the upper and lower limits should be adjusted according to the change of market environment. A reform in the proportion structure of its source is badly needed at present, which include reducing the proportion of relocation from People's Bank of China and the interests of the capital frozen when the stock is launched and increasing the membership dues and the proportion investment incomes. Finally, it is ought to charge from other potential infringement subject and get loan from People's Bank of China.The system of securities investor protection fund in China is transitional, which is less systematic and operatic. It is suggested to compensate according to the gradation, to relax the compensation requirement, to make the subject clear and to expand the invest instrument concerning the compensation. As to the consummate of the compensation limit, it is advised that to establish such system: in the premise of no protection of illegal invest, make the invest rate of secondary and small investors as the limit;Within the limit, all damage is to be compensated, while beyond the limit, proportion compensation is permitted. As to the procession of compensation, the participation of government should be limited to make the system more independent, professional and stable, in which way, more real power is offered to the protection fund. Meanwhile, increase the transparence of such process and strength the supervision. It is the best way to deal the compensation conflict by discussion and arbitration.In China, Securities investor protection fund has characteristic of administration and arrangement in the aspects of the fund external supervision and the company internal supervision. The Securities Regulatory Commission should be the only supervisor, at the same time, the supervision from market self-discipline organization should be strengthened. In this period, administration pay is still the most important path. Company function should be partly used. In the future, market function is the final form. In the end, the structure of the protection fund company should match to the function.