Research On The Protection System Of The Right Of Depositary Receipts Holders

On March 30,2018,the state council on forwarding the CSRC on developing innovation pilot enterprises to issue shares or depository receipts in the several opinions(hereinafter referred to as "several opinions"),and explore the innovati on enterprise within the territory of the listed through pilot to solve the problem,allowing pilot the red-chip companies according to the program listed on the domestic capital market issuance of depositary receipts,recognised depositary receipts as a new variety of securities.Since then,depositary receipts have ent ered the public eyes as an important means to attract the return of red-chip enterprises.On June 6,2018,the securities and futures commission according to the several opinions of the spirit of intensive released the depositary receipt iss uance and trading management measure(trial)"(hereinafter referred to as the" management method "),the pilot innovative listed companies to issue shares or depository receipts within the territory of the measures for the implementation of supervision rules and normative documents,such as specific offering for CDR provides guidance.On June 7,2018,Xiaomi submitted its prospectus for the public offering of depositary receipts to the China Securities Regulatory Commission(CSRC).As the first Chinese enterprise to apply for the issuance of Chinese depositary receipts,its issuance path has attracted wide attention.However,to officially become a new type of securities issued in the domestic market,the establishment and improvement of specific systems are still needed.Xiaomi group chooses to issue Hong Kong shares firstly and issue Chinese depositary receipts in China at the right time.On November 2,2018,the Shanghai stock exchange and the London stock exchange reached relevant agreement and officially released relevant documents of Shanghai-London stock connect,which is an important step for the actual operation of China depositary receipts.Ho wever,with the introduction of the concept of "science and innovation board",the update speed of relevant information of CDR becomes slow.No new application information of DRS appears on the website platforms of Shanghai stock exchange and Shenzhen stock exchange.It seems that the listing application of CDR has become the second option of the capital market.The reason is that as a new form of domestic securities,depositary receipts have cross-border problems in investor protection.Although financial regulators emphasize that domest ic and foreign investors should enjoy equal rights and interests,how to construct relevant mechanisms to protect the rights and interests of holders of deposit ory receipts still needs to be discussed.Financial institutions and investors are not familiar with the issuance and transaction mode of CDR,and the protection mechanism for holders of CDR is not yet perfect in China.As a result,there may be high financial risks in the operation of CDR,so the new financial form of CDR has been put on hold by regulators and investors.This paper aims to put forward reasonable suggestions for the protection of the specific rights of depository receipt holders through the legal analysis of the protection of the rights of depository receipt holders and the analysis of the current system of the protection of depository receipt holders,so as to promote the domestic listing and to issue transactions of depository receipt.The first chapter is the basic overview of the depositary receipts,which is mainly divided into three parts: the historical origin of the depositary receipts,the definition of the structure and the necessity and principle of the protection of the depositary receipts holders.Chapter two analyzes the legal basis of rights protection of depository receipts holders.Depository receipt holders are also security investors and their protection falls under the framework of investor protection.This paper analyzes the subject status inequality theory,information asymmetry theory,contract freedom theory,contract relativity theory and securities tort theory.The third chapter mainly elaborates how to protect the rights of the depositary receipt holder,from the rationality of the depositary receipts holder protection,and shall abide by the principle of concrete is discussed depositary receipts holders rights shall establish relevant system,including the depositary receipt hold er system of qualified investors,right to know security system,security system,and to make decisions of assets profit return equity security system as well as the depositary receipts tort relief system.