Research On The Legal Issues Of China Depositary Receipt(CDR) Investor Protection

Depositary Receipts(DR),also known as depositary receipts or deposit certificates,first appeared in the United States.For the investment of US investors and the financing needs of British companies,JP Morgan Bank of the United States was the depositary institution for the first time in 1927,and Selfridges Provincial Stores Limited of the United Kingdom deposited stocks as the underlying securities in Morgan Stanley's overseas trustee,Morgan.As a depositary,the bank issues a tradable ticket,the American Depositary Receipt(ADR),representing the company's stock in the United States.As part of the development of China's securities market and further opening up to the outside world,with the promulgation of relevant documents and regulations on March 30,2018,it marked the establishment of the basic system of China Depositary Receipts.While the securities market is open to the outside world,investor protection is also particularly important.In particular,depositary receipts relate to the characteristics of the two markets and their special structure legal relationships.In the case of crossborder supervision,basic market rights protection and company law differences in the protection of depositary receipt investors,there are also special chapters on investor protection in the “Administrative Measures on Issuance and Transaction of Depositary Receipts(Trial)”.This paper analyzes the legal relationships of various entities and draws on the experience of Shanghai-Hong Kong Stock Connect and Hong Kong on overseas issuers.Investigate the issue of investor protection in China's depositary receipts.The full text contains three parts: introduction,body and conclusion.There are three chapters in the main body:This paper analyzes the legal relationships of various entities and draws on the experience of Shanghai-Hong Kong Stock Connect and Hong Kong on overseas issuers.Investigate the issue of investor protection in China's depositary receipts.The full text contains three parts: introduction,body and conclusion.There are three chapters in the main body:The first chapter introduces the characteristics,nature,classification of depositary receipts,the issuance and listing mechanism of China's depositary receipts,and the legal relationship between depositary,issuer,custodian and investors.The second chapter is based on the structural characteristics of depositary receipts,the provisions of China's laws and regulations,and cross-border issues in the protection of investors.First of all,the legal provisions of various countries are inconsistent.The issue of investor protection in the issuance of securities in overseas issuers is mainly due to the fact that the legal provisions under the organic law applicable to China's legal regulation are not always problematic;the second is the cross-over of overseas issuers.Cross-border supervision issues and cross-border rights protection issues,cross-border supervision mainly has conflicts of jurisdiction between domestic and overseas regulatory agencies,domestic and foreign regulatory agencies investigating evidence collection and cooperation and information sharing issues;finally,how do Chinese depositary receipt holders participate in overseas issuance Corporate governance issues,in terms of voting rights procedures,and protection of other rights of investors.How to guarantee the exercise of the rights of depositary receipt investors.The third chapter mainly proposes relevant suggestions for the three aspects raised in the second chapter.Firstly,it is aimed at the inconsistency of domestic and foreign legal provisions,and proposes that the protection of domestic investors should adopt the principle of minimum protection in Hong Kong.China's “Guidelines for Overseas Issuers' Regulations” for overseas issuers,in order to guide overseas issuers to issue depositary receipts,to control investor protection issues in auditing and issuing;secondly,to strengthen supervision and cooperation in cross-border supervision.The information sharing law enforcement coordination between domestic and overseas regulatory agencies requires that the regulatory agencies in China need to establish cooperative relations with the regulatory agencies in the relevant overseas markets for depositary receipts in advance,and emphasize the trustee's obligations on cross-border rights protection.Finally,the issue of how to exercise the voting rights and other related rights of the depositary certificate holders should not be completely stipulated in the depositary agreement,and the corresponding provisions of laws and regulations are required.At the same time,this issue is an important part of the audit release.