Legal Control Of The Stock Market Risk

The securities market has its inherent risk because of its defects and particularities. With the transformation of technology, the movement of the world economy and the financial environment, the expansion of the depth and the extent of the market, the securities market has been playing an important role in the national economy of all countries in the world. At the same time, it has become the focus for all countries to control the stock―market risk, because of the intense fluctuation of the stock market, and the financial storm . The stock market has been developing for 11 years in our country, since Shanghai Stock Exchange came into existence in 1990. During this period, the development and the regulation become the theme of the market all the time; nevertheless, as an emerging market, the development is the main aspect. Accordingly, the risk of our market shows its particularities, and differs from the Western mature market. In this dissertation, the author endeavors to take the legal control of the security-market risk as the object of the research, in order to seek the basic values and the basic legislative frame of the securities laws by means of the positive research on the stock―market risk.This dissertation is divided into three parts. In the first part, the author analyzed the general theory of the stock―market risk, expounded the essence and characters of the risk, and the causes of the risk, beginning with the analysis of the risk definition. On the basis of the analysis, the author points out the causes of the stock market as follows: Firstly, the risk results from the securities itself which is invented by people, and from the market system itself which includes the information failures and the fluctuation of the securities market. Secondly, the risk is generated from the factors including the property structure of the corporations not being founded for the stocks market to be established, the regulation failures as well as the market failures not being avoided, and the investor's irrational behaviors and psychology existing in the market. In the second part, the author researched the basic values of the laws on the security risk control, believing that the legal system of security which has an inherent and certain relationship to the stock―market risk control, is designed to establish a transparent, fair, and just market system, to ensure the market mechanism running orderly, to reduce the stock―market risk as its value object, and with its inherent and external values, such as fairness, orderliness, equality, general adaptability, openness, regulation, paramount status, and so on, controls the risk of the stocks market. First, the legal institution of security value of fairness conforms to the requirement of fairness and justice of the securities market, which is embodied in the process of the legislation, the jurisdiction and the execution of the security law. Second, the establishment of a normal and orderly securities market shall be based on the sound legal institution of security as well as the legal order. Third, the value of openness, stability, certainty and general adaptability, which distinguish the legal institutions of security from other norms, are conformity with the requirement of openness and transparency of securities market. As a result, the participants in the securities market are provided with a reasonable expectation so as to reduce the uncertainty of investment decision-making. Finally, the distributive value of legal institution of security is fulfilled by the way of distributing the rights and duties, the information resources and the risk of securities market among the participants in the securities market.In the third part, the author studied the function of the legislative frame of the securities law system on controlling the security―market risk, including the issuing exchange and regulation rules in which the disclosure rules are the core, and the author points out its significance of controlling the risk of the stocks market, preventing from the insid...