Study On Legal Issues Of Bankruptcy Of Security Companies

The security companies play an important role in promoting prosperity of the security market. The issue of bankruptcy of security companies, in a macro perspective, has great impact on the stability of the security market of one country. And in a micro perspective, it involves the interests of investors. In recent years, many foreign and domestic security companies got bankrupt due to their severe administrative problems, which increase the risk that the investors lost their investment. And that will definitely have negative effect on the confidence of the investors and, further, frustrates the development of the security market. To deal with such situation, author believes that the law of bankruptcy of security companies should provide the investors comprehensive protection and adequate remedies.The Enterprise Bankruptcy Law is unable to solve the issues that arise from the bankruptcy of security companies. This article will discuss how to build up an effective legal system to protect the interests of investors, which is the main issue of the legal affairs of the bankruptcy of security companies.There are six parts in the paper, as following:Partâ… clarified the background and significance of this article and discussed the latest achievement obtained by scholars in this field. This part also addressed the methodology adopted in this article.Partâ…¡pointed out that compared with others kinds of enterprises, the security companies have their unique characteristics in bankruptcy by discussing two cases. So it is necessary for us to pay extra attention to the inefficiency protection of investors provided by the law of bankruptcy of security companies in China.Partâ…¢introduced the legal system adapted by USA, EU and IOSCO to protect the investors'interests and summarized that what we can learn from the foreign countries to improve our own legal system.Partâ…£analyzed the administrative and legal procedure of protecting the investors'interests and illustrate the phenomenon of executive-led in the process of dealing with the issues of the bankruptcy of security companies.Partâ…¤discussed the issues of transfer of clients, purchase of individuals'creditor's right, the stock and retrieve of the third party, the definition of relationship of trust financing and the bond reacquirement. This part also presented the author's own point of view.Partâ…¥proposed that the law of bankruptcy of security companies in China should focus on the protection of investors'interests and improve the protection system of the investors'interests from both procedural and substantive way.