Research On The Advance Compensation System In Securities Market

With the continuous deepening of China's reform and opening up,China's market economy has entered a new stage of prosperity.Recently,the Chinese government announced that it will implement a greater degree of opening up to key industries including the financial industry,relax or cancel restrictions on some financial industries,and establish financial markets that are in line with international financial markets.The securities market is an important part of the financial market,and it will face new opportunities and challenges under the new situation.At present,the total market value of China's A shares is second only to the United States which ranks first in the world.The above-mentioned achievements in the securities market are inseparable from the development of China's real economy.The entity economy provides basic support for the development of the securities market.The securities market provides important financial support for the further development of the entity economy.The securities market can not only transfer funds for the entity economy,but also broaden the investment channels of Chinese residents.As is known to all,the funds of the securities market mainly come from investors.The investors who are the providers of funds should have the discourse power in the securities market.However,investors often become victims in the market transactions.Investors in the securities market are characterized by large numbers and geographical dispersion,and it is difficult for investors to form effective organizations and limited access to information,which may result in investors not being able to effectively protect their legitimate interests in the face of damage.Although China's existing securities legal system stipulates a litigation mechanism to protect the interests of investors,it provides a relief channel for investors to protect their own interests.However,owing to the strict legal qualifications,the complicated litigation procedures,long-term and the high cost of the actual litigation,current securities disputes can not be resolved well on the basis of the existing stipulation of the securities laws.Whereas the importance of protecting interests of the investor,we need to bring in new dispute resolution mechanisms to improve the existing problems.Fortunately,there is a creative dispute resolution mechanism,which is an advanced compensation system that has been formed but has not yet been finalized,can effectively solve the above problems in the practice of China's market.The advance compensation system has been well applied in these cases that include " Financial Fraud of Wanfu Biotechnology" "Financial Fraud of Hirisun" and "Financial Fraud of XinTai Electric" and also achieved good social effects.Therefore,it is necessary for us to explore the advance compensation system and make it to be a jurisprudential and highly operational system which can provide new ideas for China's creative solution to the protection of investor interests.In this process,practical exploration,well-informed research and the wisdom of legislators and civilians should be taken seriously.