Between Administrative Regulation And Private Action

China's sponsor system fails to play its due value because of three reasons:there is imbalance between powers and responsibilities of China Securities Regulatory Commission (CSRC); the ideal and the reality of the Approval System are disconnected; the entity and the procedure of sponsor's civil liability regulation are both absent. In the period of transition, China's securities market is showing a distinctive tradition of'stressing administrative enforcement, despising civil legislation'. The one-sided reliance on administrative enforcement and the deliberate and factual inhibition of judicial intervention have brought numerous problems to protecting investors' interests and to developing the securities market, and have caused plight for the sponsor system. As tools to solve the plight of the sponsor system, administrative regulation and private action both have to face their own inherent limitations. As for private action, China brought in U.S.-style securities class actions, facing a series of internal conflicts between judicial limitations and protection of investors'interests, between individual autonomy and judicial activism, and between action economy and lawsuit abuse. The value realization of the sponsor system is rooted in coordination and improvement of the institutional environment. Improvement of the sponsor system shall seek an appropriate balancing point between administrative regulation and private action, which is the so-called'walking with two legs'and'developing both the public and the private'. Despite that in the period of transition administrative regulation and private action are faced with a series of their own problems, there is still room and relatively reasonable route for improvement:to improve the design of administrative regulation system, to rationally learn from "The Law of the Model Litigation for Investors'in Germany and to construct a bridge between administrative regulation and private action.