Research On Legal Issues Of Share Pledged Repo

Since 2013,the share pledge business has entered the exchange,and the business structure has shifted from bank and trust company-dominating to security company-dominating.Along with the economic downturn,policy tightening,stock index performance is sluggish,risks of share pledged repo business appear,and defaults are common.The number of share pledged repo lawsuits reached its peak in 2018.At present,there are two major issues that need to be resolved in China’s share pledged repo.On the one hand,the specific legal issues in the share pledged repo lawsuits that have been growing year by year need to be resolved;on the other hand,paradox and problems of legal system need to be overcome.Apart from the basic interpretation of share pledged repo,this article first analyzes the specific legal issues in the disputes of share pledged repo lawsuits from the perspective of legal practice.From a micro level,through judicial case studies,this article sorts out the controversial focus of share pledged repo litigation cases,and tries to clarify the refereeing rules for such cases.Second,it clearly points out the current legal issues of the share pledged repo,then analyzes the reasons for the legal problems of share pledged repo from three aspects: legislative,judicial and regulatory policies.At last,by locating and analyzing the legal issues of share pledged repo,it puts forward suggestions for the improvement of system design related to share pledged repo.In this paper,through the current phenomenon that the number of share pledged repo disputes is high,it delves into the specific legal issues involved in the share pledged repo,which is divided into four parts to conduct research.The first part mainly provides the basic legal interpretation of the share pledged repo.First,this article offers a concise introduction to this innovative financial product,and explores the difference between share pledged repo and buyout securities repo and the difference between transaction on exchange and over-the-counter transaction,in order to better understand the specific legal connotation of share pledged repo.Secondly,this article defines the nature of share pledged repo,which is conducive to the legal interpretation and application of existing laws.Finally,combined with the traditional transaction process of share pledged repo,this article analyzes the legal relationship involved in share pledge repo.The second part mainly analyzes the focus of disputes in share pledged repo lawsuits,with a view to providing adjudication opinions for share pledged repo lawsuits.First,due to the large number of participants in the share pledged repo lawsuit,this article studies the eligible parties in the share pledged repo lawsuit and resolves the procedural issues of who will initiate the lawsuit.Then,this article analyzes the scope of eligible pledged stocks.Second,this article focuses on the determination of the repurchase conditions in share pledged repo,the calculation and adjustment of interest and liquidated damages.Thirdly,this article sorts out the disputes about default disposal of three special types of stocks,and focuses on the issue of default disposal of the restricted stocks,judicial freeze stocks and performance compensation stocks after the integration party triggers the default disposal clause.The third part mainly analyzes the legal problems of share pledged repo at present.First,this article points out the system paradox of the share pledged repo.In the transaction,the security role of the pledged stock is very limited.Second,this article discusses the current suspension system loopholes in the share pledged repo.Third,by examining the business practice and judicial practice,this article discusses that the share pledged repo has become an important means for listed company shareholders to circumvent the sales restriction policy.Fourth,what is urgently needed to be resolved is the issue of judicial application in the disputes of share pledged repo that have been increasing year after year.Then this article analyzes the causes of the legal issues of share pledged repo from three aspects: legislation,judicial and regulatory policies.The main reasons are that the relevant legislation is imperfect,the judicial application is complicated,the relevant information disclosure system is imperfect,and the sales restriction policy forces shareholders to use share pledged repo to transfer shares in disguise.The fourth part offers the solution of the current legal issues by improving the system.First,regarding the nature of the share pledged repo,the credit evaluation management of the integrating party should be strengthened to solve the problem of the limited role of the pledged share.Second,the information disclosure system of share pledged repo should be improved.Again,the parties should be guided to modify the terms of the business agreement appropriately.Finally,for the listed company shareholders to use the suspension system to circumvent the performance guarantee and breach of contract disposal,the suspension system should be further improved.