The Study On Special Bankruptcy System Of Security Corporation

The Law of the People's Republic China on Enterprise Bankruptcy which comes in to effect on June 1^st 2007 regulates the bankruptcy of financial institutions clearly and authorizes the Central People's Government of China to draw up the decree which declare our country's attitude to open the market of capital and finance. The Law on Enterprise Bankruptcy has also provided the legal basis for Security Corporation to withdraw the market directly.Before the Law comes in to effect, the ways of Security Corporation withdrew the market are close, recombination, trusteeship and so on, but these ways have much administrative factors. Even though there are some corporations take the way of bankruptcy to withdraw the market as DaPeng Security Co., Newchina Security Limited Company, but there are also many problems during the process of bankruptcy liquidation especially on the protecting of the investor of security because of the lack of system restrictions. Bankruptcy in law is the sinking process which is used when debtor cannot pay all his debt and the condition of debtor's identity and status limited after the end of the process. In this sense these is not essential difference between the bankruptcy liquidation of Security Corporation and other market entities. Because there are so many individual investors, the bankruptcy of Security Corporation may damage the personal property greatly. If we treated improperly, it is easy to let investors lose confidence and induce the systematic risk. So we should set up the special process and system to protect the benefit of investors on basis of common liquidation process. Though the new Law of Bankruptcy provides the legal basis for the bankruptcy of security corporation, it doesn't lay down specific guidelines on process of liquidation. So how we definite the reason of bankruptcy of security company, how many market entities have the right of starting the bankruptcy process, what is the sequence of paying the debt and how we protect the investors. All of this need we do lets of work. When we look into the system of abroad, we can find that the U.S. has more perfect protecting system. It has the Securities Investor Protection Act, the institute and the detailed institute arrangement. According to the present condition of our country's legal system, I try to reinforce investor's ability of protecting themselves through the relationship between the investors and security corporation. I also try to provide my advice to Decree of the Bankruptcy of Security Corporation and the Law of Securities Investor Protection on the basis of American system of protecting investors.The first chapter introduces the security investors and the relationship between the security investors and company in detail. It also includes the content of the definition, range and characteristic of security investing. I analysis the relationship between security investors and company on the angle of civil law and contract law mainly.The second chapter analyses the present condition of our bankrupt system. This chapter uses some cases to find out the defects of our protecting system. Because we can find that some companies' bankruptcy is not only the reason of market factors but also some administration factors. So these bankruptcy is an "administrative bankruptcy", the real reason is to guarantee the stable of our financial market, so during the process of the bankruptcy the benefit of security investors is not mentioned.The third chapter introduces the bankruptcy system of American. And I mainly analyze the Bankruptcy Act, the Securities Investor Protection Act and some protecting institutes to security investors. I also analyze the superiority of American protecting system. The Bankruptcy Act has been used to financial company early, and kept improving in practice. Especially the Securities Investor Protection Act regulates the legal status, rights and functions in detail. The security investor protecting institute as the protector of investor plays a leading role in the process of bankruptcy liquidation and has the power of starting the process of bankruptcy liquidation and applying the order of guest protecting. Besides that, there is also commercial security system to protect the benefit of investors as far as possible.The forth chapter researches the legal status of security investor in our country. On the base of three chapters before, I summarize the right and duty of security investor in process of bankruptcy liquidation from the legal relationship, the special condition of bankruptcy liquidation of security corporation and the security investor protecting system abroad. At last, my conclude is that security investor is the creditor of security company in real, and it can be regulated by many ways.