On The Improvement Of Sponsor’s Civil Liability System In China

The sponsorhip system has been carried out formally in China since 2004.All companies filing for IPO,issuing new shares and meeting other legal situations,they must hire the sponsor to promote the listed issuer before the coaching and continue supervision after the securities listing,aiming to ensure the authenticity,accuracy and integrity of their disclosed information.Therefore,the laws based on the securities law stipulate the responsibilities of illusive statements of the sponsor.From the perspective of practice situation,the administrative accountability system of illusive statements of sponsor is relatively complete,and the securities law has also imposed much heavier penalties on it,which eliminates the institutional barriers of light punishment and lack of deterrence.By contrast,there are still imperfections in the civil liability system,and the private enforcement mechanism has a rather limited role.Combined theoretical research with practice situation,it is found that there are three deficiencies in the civil liability system of sponsor: first,the standard of liability identification is not clear,that is,can we directly decide that illusive statement exists in issuer,listed company and sponsor according to the decision of administrative penalty? In addition,the law stipulates that the sponsor should prudently verify the professional advice of the securities trading service agencies,but the definition of "prudently verify" is not clear.Second,there are procedural barriers to the realization of priority of civil liability.Article 220 of the securities law stipulates the priority principle of civil liability.However,in practice,the confiscated money have already been paid into the national treasury.If investors face the problem of difficult implementation after winning the lawsuit,how can we solve the problem?The third is that the system of compensation in advance is not complete.Only the securities law provides for the principle on it.Whether it is necessary to stipulate the incentive mechanism,restrictions and the uniform calculation method of compensation funds has also given rise to the discussion of the academic and practical circles.In view of the experience of comparative law,the United States has the most active and developed stock market in the world.Although the sponsorhip system wasn’t carried out in the USA,similar verification obligations of the disclosed information are performed by the underwriters,law firms,accounting firms and other intermediary agencies.The corresponding defenses and fair fund systems are also of great significance for the improvement of civil liability system of sponsor in China.The sponsorhip system of the inland of China was transplanted from the Hong Kong Special Administrative Region.At present,the stock market of Chinese Hong Kong has been developing well,and the sponsorhip system has been updated and perfected.We can make reference to the responsibility distribution mode of the sponsor in the region and the system of civil lawsuits raised by Securities Supervision Commission,and the relationship between the sponsor and service institutions in the inland of China and the use of the confiscated money should be properly adjusted.At present,we can improve the civil liability system of the sponsor in our country from the following three aspects: first,the standards of responsibility identification should be all clearly defined,and the court should properly review whether issuer,listed company and sponsor constitute illusive statements in the civil lawsuits,and stipulate that the sponsor should do the duty of general attention when reviewing the professional advice and reports of the service agencies.Secondly,the system of securities fraud compensation fund should be established.The confiscated money should be managed by the insurance fund company as the source of funding.When the investor can’t get the compensation after winning the lawsuit,the confiscated money should be first charged with the fund.The payment should be recovered from the fund to the sponsor to ensure the realization of its administrative responsibility.Finally,the incentive and restriction rules of compensation in advance should be formulated,the calculation method of compensation fund should be unified,connecting with the system of compensation fund for securities fraud.From the perspective of the structure of the article,in addition to the introduction and conclusion,the article is divided into four parts: the first part introduces the basic theories of the civil liability system of the sponsor,and briefly describes the functional orientation,connotation and value of the civil liability system of the sponsor in the IPO process.The second part discusses the current situation and existing problems of the civil liability system of the sponsor in China.It summarizes the current situation of the civil liability system of the sponsor in China from the legislative and judicial levels,and sums up the three problems of the identification of civil liability,the priority realization of civil liability and the compensation in advance.The third part is about the investigation and enlightenment of comparative law on the civil liability system of the sponsor.Through combing the civil liability system of the intermediary agencies in the United States and Hong Kong,we get some beneficial enlightenment on the identification and priority realization of the civil liability of the sponsor.In the fourth part,according to the problems summarized in the second part,combined with the functional orientation of the sponsor and the reality value of the civil liability system,making full use of the local resources and the experience of comparative law,the corresponding suggestions for improvement are put forward.