| Coming into being in the 1980s,China security market is still new and under development The development and growing strength of China security market has great significance. It has consolidated the dominant role of public ownership economy; it has helped reform the investment and financing system, expanded the scale of direct financing and solved the under capitalization problem of many state-owned enterprises; it has accelerated the operating mechanism conversion of state-owned enterprises and the establishment of modern enterprises system; it has promoted the industrial restructuring and rationalization of social resource; it has become an important channel for international capital to entering China In short, the present China security market has penetrated into every comers of China society and has become a great power pushing and influencing the development of China's economy. On the other hand, there are still a number of problems, coexisting with great achievements, such as the under quality of some listed companies, universality of insider security trading, false disclosure of information, share price manipulation, cheating clients, loopholes in law and weakness in supervision system. All of these problems became especially obvious in 2001. For example, on August 2,2001,the exposure of Yin Guang Xia manipulation deeds'resulted in unprecedentedly continuous 11 limit downs of share price, with the price falling sharply down to 2.12 yean on January 22,2002 from 30.79 yean on August 2,2001. The above-mentioned problems more or less led to the significant regulation of stock market in the second half of 2001. The emergence of these problems has seriously damaged the legal rights and interests of most investors who are considered as the cornerstone of China security market. Further, it endangered the healthy development of China security market, and even brought about the appeal of replacing the China stock market with a new one. Tracing the actual causes, that the China security market has not established a perfect liability system has not been established in China security market acts as one of them. Therefore, it is necessary to establish and perfect China's security civil liability system.China's security civil liability system is set up for security market subjects, including listed companies, security companies and intermediaries. According to this system, the security market subjects have to bear corresponding civil liabilities when they cause the investors losses owning to their illegal activities which areprohibited by security laws and regulations, such as false presentation, insider trading, rigging the market. We consider it as civil liability for tort but not liability for contract breach, because it will be more helpful for the investors suffering losses to obtain compensation by law and to maintain the legal interests of the investors. The main functions of China's security civil liability are to compensate losses, to recover damages, to repair the violated security regulations, to prevent illegal activities in security market and so on. The tasks it bears is to maintain the security and good order of the stock market through identifying the activities of security market subjects and the corresponding consequences . Although there are many kinds of sanctions against illegal deeds in security market, it is generally considered that the adoption of civil liability system carries more practical and direct significance.In the world, the United States owns the best-organized laws about the security civil liability system by setting up its security law system in special legislative ways. Mainly using the United States' legislation experience for reference, Japan and Taiwan region have also established their own security law system. Therefore, we hold that when we perfect China's security civil liability system we should draw on the advanced experience of the above-mentioned countries and areas. Certainly, we should also consider the particularity of China's secur...
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