Compensation Mechanism Of The Securities Investor Protection Fund

After the securities investor protection fund system was established in our country and the Securities Investor Protection Fund Limited Company began to compensate the investors, This article analyzes the necessarity, inside mechanism and main institutions of the compensation mechanism, and introduces the specific schemes in the main foreign countries and areas, on the base, this article evaluates the advantages and disadvantages of the present compensation mechanism in our country and puts forward some suggestions in order to avail to constitution and further perfection of our compensation mechanism of the securities investor protection fund.This article mainly adapts research methods of jurisprudentia ,demonstration and comparing, and can be divided into four parts:The first part briefly dissertates compensation of the securities investor protection fund. Protecting investor requires compensating the loss of investor property. However, there exist abuses in the manners such as security exchange special trust fund and administrative purchase. Compensation of the securities investor protection fund is an indispensable means for protecting investors and the most effective scheme in the market condition. Securities investor protection fund is widely established in many countries and areas, and plays an important part in protecting investors and maintaining the stabilization and development of the security market.The second part analyzes the inside mechanism of securities investor protection fund compensation mechanism. The compensation of securities is a must to protect the profit of investors, and to maintain confidence of investors. But over-protection may cause moral hazard of the correlative subjects, which does harm to the healthy development of securities market. So how to pursue the balance between investor protection and preventing moral hazard becomes a primary problem that should be considered. In order to solve the problem the compensation of the fund must be controlled in a proper range and to a limited extend.The third part analyzes the main institutions which compose the compensation mechanism. Compensation mechanism of the securities investor protection fund is constructed by compensation condition, compensation object, compensation range, compensation quota and compensation proceeding. This article analyzes the inside mechanism and main content of these specific institutions and introduces provisions of these institutions in foreign countries and areas.The fourth part focuses on how to perfect compensation mechanism of the securities investor protection fund in our country. On the basis of the discussing of the inside mechanism and main institutions , this part gives analysis of the present scheme of compensation mechanism, pointes out the advantages and disadvantages, and puts forward suggestions for further perfection on the aspect of the way of providing, the content of the specific institution as well as the linkage to and cooperation with some correlative institutions such as bankrutcy proceeding.Compensation mechanism is the kernel of the securities investor protection fund system, whose frame and design make a difference to whether the effect and aim of the fund can be achieved. The institution design and perfection for compensation mechanism should obey the original intention for protecting investor , follow the inside mechanism to balance protecting investors'profit and preventing moral hazard, and use the practice of mature market in foreign countries and areas for reference. Thus, compensation of the securities investor protection fund can play a certain part in maintaining the stabilization and development of securities market.