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Legal Issues Of Advanced Compensation In Securities Market

Posted on:2022-04-02Degree:DoctorType:Dissertation
Country:ChinaCandidate:Y F GuoFull Text:PDF
GTID:1526306323973749Subject:Economic Law
Abstract/Summary:PDF Full Text Request
Facing the dilemma of investors in China’s securities market,cases of advance compensation,such as "WanFuShengKe","HaiLianXun" and "XinTai Electric",have initiated a beneficial exploration on how to solve the problem of timely compensation for the damaged qualified investors under the context of China’s securities law.Based on balancing the interest conflicts of the respective subjects,the advance compensation system in the security market is a dispute settlement mechanism to solve the investor’s civil damage compensation,and it has become an important innovation system to protect investors in the new securities law of our country.How to make the subject of advance compensation take the initiative to compensate the damaged qualified investors is the primary problem in the security market.If there is no prior subject who takes the initiative to undertake the function of advance compensation,the object of advance compensation will not be able to obtain compensation in a timely and effective manner.Different laws,although applied in different ways in practice,tend to adopt the same or very similar solutions to similar problems.For example,the special Fund for investor’s Interests compensation established by China and the fair Fund established by the United States both adopt the"special fund" mode of "one case one establishment" to make advance compensation for the damaged qualified investors.However,the investor protection funds set up by various countries adopt the "fund pool" mode to make advance compensation to the damaged qualified investors.The most significant difference between the various models is the different source of funds for the "special fund" used to compensate qualified investors who have suffered losses.This paper aims to sort out the basic issues of the advance compensation system in the security market,and explore the advanced and mature experience of the relevant countries or regions in the aspects of the scope of subject,scope of object,source of funds and compensation procedures of the advance compensation in the security market,so as to solve the problems existing in the advance compensation system of the security market,which will help to highlight the advantages and disadvantages of the advance compensation system in the security market,mobilize the enthusiasm of investors,and thus achieve the unity of the protection of investors’interests and the good operation of the security market.In addition to the "Introduction" and "Conclusion",this paper consists of five parts.The introduction starts from the topic background and research value of the paper,introduces in detail the current research status of the basic issues of advance compensation in the security market at home and abroad,and on this basis,it further elaborates its ideas,methods and innovations.This paper separately discusses the basic issues,the scope of subject,the scope of object,the source of funds and the procedure of advance compensation in the security market.The first chapter focuses on the basic issues of the advance compensation system in the security market.The advance compensation system in the securities market is intended to enable the relevant parties to carry out the behavior of advance compensation,so that the qualified investors who suffer losses in the securities market can get relief first.The system mainly includes five basic principles of "openness","fairness","impartiality","efficiency" and "appropriateness",which are mainly applied in the field of fraudulent issuance or false statement.However,due to the fuzziness of "other major illegal acts",it does not exclude the possibility that it can also be applied in the field of insider trading or market manipulation.By tracing the justification behind it,the advance compensation system in the securities market plays an irreplaceable role in making up for the defects in the operation of securities civil compensation litigation,improving the efficiency of the amount of compensation for investors,and strengthening the accountability of the subject of securities civil compensation.Based on this premise,this chapter divides the advance compensation system into three main legislative modes:the advance compensation with the participation of fair funds,the advance compensation with the participation of investor protection funds,and the advance compensation with the active participation of the self owned funds of the contingent liability subject.The above ontological analysis and overseas experience have laid a theoretical guidance for the legal issues related to the advance compensation in the security market.The second chapter systematically discusses the legal definition of the scope of the subject of advance compensation in the security market,which aims to show the identification of the subject of advance compensation in different models of advance compensation in the securities market.In the advance compensation model with the participation of fair funds,issuers,listed companies,security market intermediaries,controlling shareholders,actual controllers and other personnel of the company can be regarded as the main subject of advance compensation for the damaged qualified investors.If the funding source of investor protection fund has not been expanded,the issuers,listed companies,security market intermediaries,controlling shareholders,actual controllers and other personnel of the company are not absolute likely to be identified as the subject of advance compensation.In China’s securities market,through the analysis of the definition of the scope of the subject of Advancecompensation in the securities market in legislation and practice,it is found that there are some problems in the legislation,such as unclear responsibilities of the subject of advance compensation,the issuers are not directly defined as the subject of advance compensation,and the lack of the realization of the recovery rights of the subject of advance compensation.There are some problems in practice,such as the definition ofthe scope of the subject of advance compensation is not based on the concept of market operation,the subject of advance compensation does not "settle disputes and stop disputes" for the investors’ loss events caused by fraudulent issuance and misrepresentation,and the definition of the subject of advance compensation stimulates the transfer of responsibility of the relevant people.Combined with the above three modes of advance compensation in the securities market,this paper explores the legislative perfection of the scope of the subject of advance compensation in China’s securities market from the following aspects:the legal definition of the subject of advance compensation with clear responsibility,the legal definition that the issuer should be "directly" listed as the Subject of Advance Compensation,and the legal definition of the subject of advance compensation determined by share compensation.The third chapter deeply analy the legal definition of the scope of the object of advance compensation in the security market,the main purpose of which is to discuss what conditions the damaged investors must meet before they can become the"qualified" damaged investors and the objects that can be compensated.Starting from the analysis of the types and classification parameters of investors in the security market,and further compares the damaged investors and damaged qualified investors under the advance compensation model with the participation of investor protection fund and the advance compensation model with the participation of fair fund.After analysis,it is concluded that investors who have suffered illegal acts and suffered damages can’t be the damaged qualified investors who can get the advance compensation in the securities market on any occasion.In the advance compensation model with the participation of fair fund,the object of advance compensation should be established on how to deal with the relationship between "investor protection" and"self-responsibility for risk".While defining the damaged qualified investors with strict standards,there is no strict distinction between the types of the damaged qualified investors.In the advance compensation model with the participation of investor protection fund,the object of advance compensation should be established on the basis of how to deal with the principle of "difference" and "inclination" of investor protection,which tends to protect the vulnerable and qualified investors.In the advance compensation model with the participation of investor protection fund and the advance compensation model with the participation of fair fund,whether the damaged qualified investor can actively declare compensation and provide other compensation information within the prescribed time is the key to distinguish the identity coincidence and separation between the scope of compensation object and the scope of subject of compensation.The above ontological analysis and foreign experience have laid a foundation for the legislative improvement of China’s security market from the refinement and determination of the determination criteria,and the preferential compensation for the damaged and qualified ordinary investors.The fourth chapter focuses on the analysis of the source of funds for advance compensation in the security market,the main purpose of which is to explore how to build a bridge between the subject and the object of advance compensation.Based on the principle of corrective justice and the principle of improper profit return,as the logical starting point of the source of funds for the advance compensation model with the participation of investor protection fund and the advance compensation model with the participation of fair fund,and examines the situation of the fines and confiscations collected by the subject of security violations and investor protection fund includes the situation of the source of funds used to compensate the damaged qualified investors in advance.Let’s return to the singleness of the source of funds for advance compensation in China’s securities market and the fuzziness of the scope of application of "other major illegal acts" of issuers stipulated in the current securities law.The controlling shareholders,actual controllers and relevant securities companies of the issuers,who are the "legal" subject of advance compensation,should go hand in hand and actively implement advance compensation for damaged eligible investors.When the source of funds for advance compensation is limited,we should establish a"fund pool" model to improve the legislation of the source of funds to compensate the damaged qualified investors in advance.The fifth chapter deeply analyzes the procedure of advance compensation in the security market,which aims to reveal that justice in the procedure may affect the justice of the final compensation result for investors.In view of the consideration of the procedure of advance compensation in the security market,analysis of the procedure of advance compensation in terms of the initiating subject,the initiating time,the procedure in the design process of the distribution scheme,the review in the design process of the distribution scheme,and the right of recourse,and comes to the conclusion that although the initiating subject of advance compensation in China is relatively simple when its own funds are included in the source of funds,and the determination of the initiating time is not so complicated,but it still needs to be improved from the aspects of determining the investor’s participation in the design process of compensation distribution scheme,the review and inspection procedure of distribution scheme,and the implementation of supporting measures for the right of recourse.
Keywords/Search Tags:Advance Compensation, the Subject of Advance Compensation, the Object of Advance Compensation, the Procedure of Advance Compensation
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