Research On Legal System Of Advance Compensation In Securities Market

In recent years,there have been frequent cases of fraudulent issuance and false statements in China’s securities market.Due to the lagging litigation procedures,it is unable to protect investors in a timely and effective manner.Therefore,a new legal system is needed to cope with the new changes in the securities market.At present,regarding the system of advance compensation,China has clear provisions in the law on the protection of consumers’ rights and interests and the law on road safety and transportation.Wanfushengke’s false statement cases,hailianxun’s cases and xintai’s false statement cases all draw lessons from the existing system and apply the system of advance compensation to the securities market.From the perspective of the implementation effect,this system has effectively solved the infringement disputes,recovered the losses of investors to the maximum extent,and restored the market order in a timely manner,which can be regarded as a major progress of the investor protection system of the securities market.However,there is still no legislation on the system of advance compensation in the securities market in China,which leads to no uniform standard for reference in practice and is not conducive to protecting the interests of investors.In addition,the securities market compensation system itself also has some problems,such as the content is not comprehensive,the theoretical basis is weak,the lack of operability,and so on,can not meet the needs of the development of China’s securities market.Therefore,the research of advance compensation system has theoretical and practical significance.The author thinks that the following considerations may be taken into account for the introduction of the advance compensation system in the securities market.Compared with the law on the protection of consumers’ rights and interests,securities are actually a financial product in the financial field,so securities investors are actually equivalent to consumers in the securities market.Or compare "law of road traffic safety",the investor that suffers a loss is equivalent to victim,sponsor orgnaization is equivalent to the insurance company that pays compensation beforehand in traffic accident.Therefore,it is of great significance to study the advance compensation system in the securities market.This paper is divided into five parts.The first part mainly expounds the specific research background and significance of this paper,and expounds the relevant research status at home and abroad,literature review and the overall structure of the paper.The second part mainly introduces the legal system of securities market leading to pay some of the basic content,this paper expounds the leading compensation system the concept,characteristics,nature and the necessity of analysis of some more basic questions,such as in detail,discusses the securities market leading compensation system for the protection of the rights and interests of securities investors,the market order of stability plays an important role,and discusses the important significance of leading compensation system.The third part mainly discusses the current situation of legislation and the problems existing in the system.The first show introduces the current provisions of the securities market compensation system in China.At present,the legal documents concerning the system of advance compensation in the securities market include securities law,measures for the management of securities investor protection fund,etc.Secondly,it introduces the current practice cases related to the system,including the influential wanfushengke case and xintai electric case.The advantages and disadvantages of the two cases are discussed.At last,it introduces some problems existing in the current practice of this system,which mainly include the following points:first,the provisions on the subject of advance compensation claim in the securities market are unreasonable.The current judicial interpretation only stipulates that the claimant shall be confirmed at three time points:the implementation date of false statement,the disclosure date of false statement and the correction date,but the subjective psychology of investors is not taken into account.Secondly,the subject of liability for compensation in advance still needs to be further improved.At present,the document issued by the CSRC stipulates the obligation of indemnity in advance for sponsor companies.But the regulation has not yet risen to the legal level,the effectiveness of the rank is not high.Third,regarding the effectiveness of the new compensation settlement agreement and the relationship between the agreement and litigation,the legislation still needs to be further clarified and improved.Fourthly,the scope and amount of compensation claimed by investors are not clear enough.In the compensation,we need to consider the subjective psychology of investors and exclude speculators.Fifth,there are no clear provisions on the source of compensation funds and how to manage them.The fourth part mainly introduces the relevant compensation system provisions of some countries and regions outside the region and makes a comparative analysis between them and China’s advance compensation system.The author introduces and discusses the compensation system in the United States,the United Kingdom and Taiwan.By comparing the relevant compensation system of many countries and regions outside the region with that of China,this paper discusses the deficiency of the system of advance compensation in China’s securities market,points out that China can learn from the relevant system outside the region,and puts forward some Suggestions for the development of the system of advance compensation in China.The fifth part mainly aims at the problems existing in the legal system of advance compensation in China’s securities market,and puts forward the following Suggestions.First of all,define the criteria for qualified investors in the securities market.When we distinguish the request subject,we should take the standard of causality as the main one and the standard of good faith and trust as the auxiliary one.Secondly,it is reasonable to stipulate the subject of liability for the advance compensation in the securities market.The proposal puts forward that the advance compensation should be stipulated as the legal obligation of the sponsor company,so as to avoid the prevarication between many subjects.Third,clarify the scope of effectiveness of the settlement agreement.The proposal puts forward that investors still have the right to claim compensation from other joint and several subjects after applying for compensation from one subject.In addition,if one of the indemnifying parties refuses to fulfill its obligations,investors can protect their rights through judicial channels.Fourth,as for how to determine the scope of investors’ losses,the author suggests that the compensation period should be determined by the implementation date of false statements,disclosure date and correction date.Then,the amount of compensation shall be limited to the actual loss suffered by the investor.Fifth,make clear the source and management of the compensation fund in advance.The author puts forward that in order to make up for the loss of investors,the scope of compensation funds should be expanded.For the management of compensation funds,the fund manager mode,bank account management mode and fund transfer management mode should be comprehensively adopted to ensure the neutrality and fairness of compensation funds.