The Practice And Development Of Korea’s “capital Market Consolidation Act”

Capital market is one part of the financial market, also can say a stage that happens organized and repetitive capital circulations between supplier and consumer. It is the core of the country economy.All countries of the world has much discussion about the role of financial industry and financial market. Especially, after the global financial crisis, there are many discussions aboutrevision of financial regulations for escape from the financial crisis and get driving force for economic growth.South Korea reflect the will of current trend of the world and domestic needs, legislate the “Capital Market Consolidation Act”, deepening the development of financial markets and strengthened investor protections. The “Capital Market Consolidation Act” came into effect on February 2009, incorporates the previous six law <Securities and Exchange Act>, <Futures Trading Act>, <Indirect Investment Asset Management Business Act>, <Trust Business Act>, <Korea Exchange center Act>, <Korea’s Merchant Bank Law> into the one Act, make institutional regulation switch to the functional regulation, broadened the range of business areas and financial investment products of the financial investment companies. This make the financial organization which runs their own work depended on the business area change into financial conglomerate, enhances the competitiveness in the international capital market. But unfortunately the time of the enforcement of the “Capital Market Consolidation Act” coincided with a time of global financial crisis, so have some statement of opinion that it could’t achieve the legislation purposesordinarily. South Korea still working on the law revision for make crisis turn into opportunity.Lots of world-class economist anticipates China will become the global financial hub in few years from now. Now strengthening and increasing the role of China in global economy, and also have more and more close relationship between Chinese capital market and World capital market, China need to check up the current financial system and take supplementary measures for preparing to become a global financial hub.Although the scale of South Korea’s economy is much smaller than China, but globalized earlier. It makes South Korea to became an important market in Asia. After South Korea suffered the IMF financial crisis, had bank-based with the capital market development in government-led, so just could have restricted development on capital market. But with the legislation of the “Capital Market Consolidation Act”, made the capital market other than bank improved, and get the whole social economy vitalized.China, in fact, is a country which based on socialist system, so had participated to a world capital market’s development late. But as the introduction of capitalism, by repeated rapid development, became the country with the most rapid pace and potential. But Chinese capital market internal support system is not equipped than the external rapid development, has the limitation of the development. The current financial market in China, like South Korea’s financial markets have had problems, bank has responsible for most of the funding. But in this bank-based funding system, it is not easy that renovate enterprises which have the potential to bring social development get a sufficient fund.At present, China’s capital market has problems like South Korea used to had before adopting the “Capital Market Consolidation Act”, and I think Korea and China’s capital market has ultimately have the same goal such as development of the capital market and investor protection as well. So in this thesis, to draw implications from the implementation progress of Korea’s “Capital Market Consolidation Act”, through a comparative analysis, want to make some proposes improvement about Chinese capital market’s problem which to be faced in the future.This thesis has three point of views for studying of the “Capital Market Consolidation Act”. First, from the legislation of the “Capital Market Consolidation Act” through to the enforcement of process, study the necessity of integration of legal system. Second, study about the system of market access, investor protection, investor remedy and relief system in the “Capital Market Consolidation Act”, research learning point and improvement point. Third, find out how can Chinese regulation change to a better one including a change of world financial Environment.This thesis has five big part of organizing.Chapter 1, a part for explaining the birth of the “Capital Market Consolidation Act” of South Korea. To make a deepen understanding, study the background of the “Capital Market Consolidation Act”, and inquire the argument when it was at an enactment process. Also to make thoroughgoing understanding about the meaning of the “Capital Market Consolidation Act”, write about the main contents of the “Capital Market Consolidation Act”, and find out the reason why the world’s most of the country make the legislation turns into the consolidation concept law.Chapter 2, a part for explaining the development of the “Capital Market Consolidation Act” of South Korea. From February 2009 the “Capital Market Consolidation Act” began operation up to now, report the whole process of a development. Make an analysis about the years of enforcement the “Capital Market Consolidation Act”, research a point of good effectiveness and a point in dispute, and the way of compensate of the defect. Refer to reference materials from the “Capital Market Consolidation Act” of South Korea, give Chinese capital market for some policy implication.Chapter 3, a part for market access of the “Capital Market Consolidation Act”. In this chapter, we can see three kind of market access, access of financial investment products, access of financial investment company, and access of financial investor. Study about market stabilization schemes with using market risk management, and give Chinese capital market for some policy implication.Chapter 4, a part for investor protection system of the “Capital Market Consolidation Act”. The articles of investor protection system is the most important and significant part of the “Capital Market Consolidation Act”. Understand the current situation of the investor protection system of the “Capital Market Consolidation Act” of South Korea, research the indication of problems and find out the improvement way, give Chinese capital market for some policy implication.Chapter 5, the last chapter of main contents, a part for remedy and relief system of the “Capital Market Consolidation Act”. Analyze about civil liability, administrative responsibility, criminal liability of South Korea when happens of infringement on rights and interests to financial investor in capital market. Study about the improvement way with promoting investor confidence, give Chinese capital market for some policy implication.The present writer from this study wants to give Chinese capital market for some policy implication below. First, accept the concept of ‘inclusive principal’. This principal can cover all kind of the financial products, so it can be control at any circumstances. Second, for better protect investor, need to classify investor into two or more group like ‘professional investor’ and ‘normal investor’. Resources in society, like human resource, is limited, so through classification we need to focus on the investor who really needs help. But still need to guarantee of freedom of invest and equity, there need to permit the request of changing investor position when the investor satisfied the standard condition. Third, protect for investor in good faith, need to reorganize remedy and relief system. Check up and reorganize to make sure it can acts for prevention.Compare this thesis with the other thesis that was published in China before, covered a complete process from the birth of the “Capital Market Consolidation Act” to recent time, the background of birth, the argument before its legislation, the experience after its enforcement, and so on. Also can say it is overall conclusion, provide a differentiated value. To make a accurate meaning delivery, refer to the documents from Ministry of Strategy and Finance of South Korea, their report materials and press release was a big help to figure out the progress of development. And also find Chinese and Korean textbooks about capital market and regulation to make a comparative study. Besides, some academic essays that was written in Korean and published in South Korea by Chinese scholars really helped to overcome the language barrier.This thesis was written for study about present good point and unsatisfied point the “Capital Market Consolidation Act” of South Korea, analyze about the way its improvement, give Chinese Capital Market some policy implication. Hope Chinese Capital Market establish and enforce about consolidation act, improve the efficiency of capital market management, make a great advance in global economy.