Research On Investor Protection Of Securities Investor Protection Corporate

Protection for investors, especially for small and medium investors, is a key factor to build a developed capital markets. Nowadays, under the trend of globalization, systematic, comprehensive, efficient system of investor protection has became an important means of national capital market competition. Many countries attach great emphasis on the construction of investor protection system, securities regulation and judicial relief system, and continue to explore the specific measures to safeguarding the legitimate rights and interests of investors which meet the needs of system construction. The establishment of the securities investor protection institution to compensate the clients of the securities company which has fell into financial difficulties for their loss due to inability of payment by its fund has been an important means to maintain confidence to the securities market where pay crisis occurs. The system of ex post compensation for investor protection, first founded in Canada and America in 70's of 20th century, has played an active role in restoring investor confidence and keeping the securities market smoothly running, which has followed by many other countries. As there are differences in development stage of securities market and the regulatory model between the countries, the subject property and functions of the securities investor protection institutions are different.With reference of the U.S. model, our country built the Securities Investor Protection Corporate (hereinafter referred to as"Fund Corporate") in 2005 to manage and use Securities Investor Protection Fund (hereinafter referred to as"SIPF"). The purpose of establishment of our fund company, which is similar to SIPC of U.S, is to response to the large-scale payment crisis caused by closure of a large number of the securities companies. Therefore, the major function of the Fund Corporate is to purchase clients'claims in securities bankruptcy. Due to the executive-led approach taken in the risk management of problem securities, including insolvency proceedings, the role of the Fund Corporate has been limited in the payment of the acquisition capital.Until 2008, China has completed centralized governance of the securities market, clearing a large number of problem securities companies, so that industry-bankruptcy crisis is no longer the main reason for damage to the interests of securities investors. For a long time coming, improving the risk management of securities companies and protecting the legitimate rights and interests of investors in securities trading will be the research and practice focus of investor protection. This paper will discuss the role that the Fund Corporate shall play in the new era in investor protection from two aspects: improvement of compensation function and expansion of investor protection.With regard to the compensation function which is applicable only to certain clients of securities companies and paid partially, the investors of the difficult securities company still suffer some loss. For the purpose of greater protection of the interests of investors, the Fund Corporate shall play a more active role in fund maintenance, prevention and intervention in securities'risks.With regard of insufficient incentives to protect and relieve investors'interests of regulators due to the interest conflict, the changes of major risks which the investors face, the Fund Corporate shall expand investor protection functions in addition to the compensation with its resources, such as investor education, risk disclosure of financial products, relief of investor rights, improvement of legal system of investor protection.Investor protection has a long way to go. The development of securities market require the Fund Corporate make a change to constantly adapting to new situations and solving new problems, so as to provide security to the securities market.