Research On Fraud Listed Advance Payments

Antecedent compensation is a new way to protect the rights and interests of investors arising from China’s securities practice.there are still many flaws in the practice of antecedent compensation,such as the confusion between the payee of compensation and the recipient of compensation,the unreasonable calculation of the amount of payment,the incomplete payment procedures,and the lack of effective supervision of compensation,and so on.Therefore,we believes that a sound antecedent compensation mechanism ought to be established in order to better protect the investor’s rights and interests.First,the payee of compensation and the recipient of compensation should be clearly determined.The payee of compensation can be clarified into four types: the initiator,controlling shareholder and actual controller;the issuer,the securities company;intermediary service agency.In the legislation of antecedent compensation,the payee of compensation should not be over-constrained,the payee of compensation can be determined through its own autonomy,or it can be served by jointly fund,and in special circumstances the investor protection fund can also act as the payee of compensation.For the recipients,the antecedent compensation should be targeted at small and medium investors,not all shareholders.Second,the calculation method for antecedent compensation should be improved.When determining the scope of compensation,the date of “first disclosure” should be strictly observed as the disclosure date.Though,there is no absolute exact calculation method at present,the calculation method should be chosen to better protect the investors.When considering systemic risks,we should adopt a cautious attitude and cannot easily determine systemic risks.Moreover,we must consider both the positive and negative impact of systemic risk on stock prices.Third,the design of antecedent compensation procedure should be improved.It shall be divided into two steps,the compensation procedure and the recovery procedure.In the compensation procedure,first,the investor protection fund must be established as the manager of the fund;second,the effectiveness of the settlement agreement should be strengthened through judicial confirmation,and other responsible persons should be included into the parties of the settlement agreement;Third,advanced electronic computing systems should be used to achieve an effective compensation.In the recovery procedure,it is necessary to establish the order for the allocation of system’s responsibilities,and to improve thecompensation method of shareholder representative litigation,priority compensation,liability insurance.Finally,an antecedent compensation monitoring mechanism should be established.First,to set up an oversight committee.The committee should be composed of the payee of compensation,the neutral expert,and the representative of recipient,which is responsible for the overall supervision of the antecedent compensation.Second,to establish an online hearing.A network hearing can be conducted to discuss the major issues in antecedent compensation using the well-developed online social media,in which way all investors are able to fully express their opinions.Third,through the supervision of independent institutions,the professional supervision of compensation should be realized.