Study On The Construction Of CDR's Legal System

DRs are negotiable certificates issued by depositaries. These certificates represent the ownership interest in a foreign private issuer's securities deposited. The underlying securities represented by DRs may be either debt or, more commonly, equity instruments. The depositary is the legal owner of the actual stock certificate of the foreign security, while the investor hold a negotiable instrument representing the interests of the underlying securities as the trust property. Since DRs relate to the offering and trading of securities in two separate stock markets and to the converting of securities between the two separate markets by the depositries, the offering, trading and regulatory framework of DRs are transitional. Therefore, DRs are a kind of financial instrument with complex instructions. The first DRs was introduced by JPMorgan in 1927.Since the birth of DRs, they have become the most widely used financial derivates in the international financial market.With China'opening up to the outside world,the globalization of China's security market is accelerating too. Both the inside and the outside of China are calling for the introduction of China Depositary Receipts (CDR). But the complexion of its legal system, the transnationally regulatory framework and the low openness of our capital market are the barricades for the introduction of CDR. How to construct the CDR that can realize the value of DRs, ensure the safety and efficiency of the transfer of the international capital and protect the interests of investors. This thesis is trying to construct the legal system that not only can consist with the character of our security market, but also maximize the system value of DRs, drawing on the successful experience of others and international practice.