Study On Supplementary Liability Of Stock Exchanges

Self-regulation is one of basic functions of stock exchanges. The purpose of stock exchanges' self-regulation is to prevent securities violations which are committed by issuers, member brokers and investors. If the cause of investors' damage is remiss of stock exchanges who are neglectful of their duties in self-regulation, stock exchanges should bear responsibility for investors'damage. Issue discussed in this paper is that what kind of liability stock exchanges should be charged with. This paper consider that issuers, member brokers and other investors should firstly be responsible for investors'damage, if they are not able to completely compensate for the damage, stock exchanges would be charged with supplementary liability. On supplementary liability of stock exchanges, this paper will be divided into five parts in detail:Part I analyses provisions which is connected with civil liabilities of stock exchanges for negligent regulatory in related laws, administrative regulations and judicial interpretations. After analysis, we found that there's no relevant provision in Securities Law and securities-related administrative regulations and judicial interpretations. In legal practice, such cases are dealt with as infringement cases. According to the relevant provisions of the Tort Law, negligent regulatory of stock exchanges and securities violations which are committed by issuers, member brokers and investors constitute several infringing act without connected will. As a result, stock exchanges should be charged with several liabilities. However, the application of several liabilities will weaken the preventive effect of Securities Law for securities violations.Part II explores the conception, characters and attributes of stock exchanges' supplementary liability. This paper concludes that stock exchanges'supplementary liability is a kind of civil liabilities, rather than administrative liabilities. Furthermore stock exchanges' supplementary liability belongs to tort liability, rather than contract liability. Supplementary liability of stock exchanges is characterized by its nature of supplementary. In addition, form the perspective of compensatory function and deterrence function, in contrast with additional ones, supplementary liability of stock exchanges just plays general compensatory and deterrence role in securities violations regulation.Part III motivates the inquiry that what theoretical foundation supplementary liability of stock exchanges based on. This part is constituted by two questions:why issuers, member brokers and investors should compensate for investors'damage at first and why stock exchanges bear supplementary liability.Part IV discusses the constitutive requirement s of supplementary liability of stock exchanges form the perspective of civil offence, damage, causation and fault. Classification of stock exchanges' regulation, the relationship between securities violations and self-regulation, and Hand Formula are involved in this part.Part V explores the distribution ofonus probandi of stock exchanges'supplementary liability. Taking features of securities violations into account, it is necessary alleviate investors'obligation of ofonus probandi.Part VI analyses the enforcement of stock exchanges'supplementary liability. The enforcement of stock exchanges'supplementary liability, containing external and internal effects, is associated with the issue that how to distribute damage among investors, stock exchanges, issuers and member brokers.As a conclusion, the creation stock exchanges'supplementary liability should achieve the balance of compensation and deterrence, only in this way can maximize the social benefits of securities violations regime.