Procedural Regulation Of Self-regulation Of Stock Exchanges

Since America began to adopt the legal self-regulation in stock exchanges, how to regulate the self-regulation of stock exchanges has become an important task in theory and practice. It is also an important task in the securities market in China. The target of my dissertation is to set up a theoretical frame to clarify the foundation of the legal self-regulation of stock exchanges and to propose an alternative system for legal regulation of stock exchanges in China.The self-regulation of stock exchanges is to manage its members, listed companies, and the transaction behaviour. The foundation of legal self-regulation of stock exchanges is the agreement among members, listed companies and investors. In another word, self-regulation is the autonomy of contracting parties, and the contractual relationship adjustment among contracting parties. With the contracting parties’authorization, self-regulat- ion of stock exchanges is to enact and enforce self-regulatory rules, and settle the disputes to balance the conflicts of interest and distribute the exchange surplus among the contracting parties. Because of the contracting parties’autonomy, self-regulation of stock exchanges can balance the contracting parties’conflicts of interest to some extent. However, self-re- gulation of stock exchanges can not always fairly distribute the exchange surplus among the contracting parties in consideration of its own interest. The aim of legal regulation of self-regulation of stock exchanges is to rectify the unfair distribution of interest among contracting parties under the self-regulation of stock exchanges and ensure that self-regulation of stock exchanges can fairly distribute the exchange surplus among the contracting parties.The conflicts of interest of stock exchanges are the conflicts of the contracting parties. The reason why the self-regulation of stock exchanges can not fairly distribute the exchange surplus among the contracting parties is the imbalance of power and asymmetry of information of the contracting parties. The imbalance of power and asymmetry of information of the contracting parties exists in the self-regulatory governance structure of stock exchanges and implementation system of self-regulation right.“The procedural regulation of contract law”is to realize equality by means of procedural equity, which means law can eliminate or reduce the imbalance of power and asymmetry of information among the contracting parties and thus realize the fair distribution of exchange surplus. Law can also eliminate or reduce the imbalance of power and asymmetry of information among the contracting parties in the self-regulatory governance structure of stock exchanges and implementation system of self-regulation right to make sure the equality of self-regulation of stock exchanges. There are two ways to regulate the self-regulation of stock exchanges. First, the self-regulatory governance structure should be regulated according to the principles of separation, independence and fair representative. Second, the implementation of self-regulation right in stock exchanges should be regulated according to the principles of publicity, equal negotiation and rational reasoning. Finally, in order to avoid failure of procedural regulation of self-regulation of stock exchanges, court should intervene in self- regulation activities of stock exchanges. By stricter judicial procedure, court can supervise and inspect the implementation of self-regulation right to ensure equality of self-regulation of stock exchanges.