Study On The Advance Compensation System Of The Sponsor

Over the past decade or so,it has been a period of rapid development in China's securities market.The number of listed companies and the turnover of stocks have risen sharply.More and more companies and investors have joined the tide of the stock market.At the same time,it is not uncommon for the securities market to violate laws and regulations,and the illegal situation of securities is still severe.Many companies have been seeking better development opportunities through listing and have obtained better development platforms.Frequent financial fraud cases have been made and information disclosure has been severely distorted,causing huge losses to the securities market and investors.Securities intermediaries that are externally regulated by the company not only do not perform their supervisory functions well,and many even become participants and initiators of fraud violations,resulting in failure of the “gatekeeper” mechanism.Under the background of the reform of the registration system,the responsibilities of all involved parties need to be refined.In order to strengthen the responsibilities of intermediaries,the China Securities Regulatory Commission reiterated that it must establish a sponsor institution's advance payment system.This article includes four parts in addition to the introduction and conclusion:The first chapter mainly introduces the cause and effect of the case of "Xin Tai Electric's fraudulent listing",the specific process of the sponsor's advance payment,and the controversial content of the advance payment.Among them,the claims process discussed in detail from the following five aspects: the establishment of the first-amount compensation fund,the formulation of the first-principles payment plan,the identification of qualified investors,the scope of the “loss” of the first-line payment,and the management and operation of the advanced compensation funds.At the same time,this chapter introduces the problems existing in Xintai Electric's case and lays a foundation for the detailed analysis of the following text.The second chapter deals with the connotation and function of the sponsor institution's first payment system.The first part introduces the sponsorship system,the sponsor's duties,and the sponsor's prior payment.The second part introduces the system's ability to protect the weak,reduce the cost of private rights relief,stabilize the securities market quickly,and urgesponsors to perform their duties diligently.The third chapter introduces in the structure and content of the sponsor's prior payment specifically.Firstly,the object and scope of the sponsor's prior payment are clarified.Then the nature of the claim agreement and the agreement are analyzed.Finally,the responsibility of the sponsor institution for the first payment is explained.The forth chapter discusses the legal problems existing in China's sponsor agencies in the first payment specifically.Specifically,there are the following problems: the mandatory and voluntary nature of claims is unclear;the preconditions for claims are not clear;the procedures for negotiating claims are unfair;there is a conflict between compensation agreements and litigation procedures;the risk of being difficult to ask for compensation after the advance compensation;the risk of lacking of institutional protection when investors can't get payment;the risk of unclear supervision.In the fifth chapter,the following legislative proposals are proposed for the payment system: to ensure the voluntary principle for the advance payment of the sponsor institution and the prepayment obligation;to establish a fair and viable antecedent payment mechanism;to straighten out the relationship between the prior claims agreement and civil procedure;to introduce the liability insurance of sponsor agencies to resolve the risk of recovery failure;to establish a guarantee system for the sponsors' first payment to ensure investor protection,and establish a supervision system for the sponsor's advance payment program and compensation funds.