The Research On Chinese Investor Protection Based On The Law And Finance Theory

Investors are capital suppliers and the main body of Chinese security market. Because information asymmetry and information search cost, they are in a weak position. To achieve the stable development of the securities market, we have to protect the investors'legitimate rights and interests. In recent years the rise of law and finance is one of the most cutting-edge financial theory, the theory including legislation and enforcement of the legal system, causing differences in different levels of investor protection, thereby affecting corporate governance, ownership structure and external financing and, ultimately affect a country's financial development, Investor protection is core of the law and finance theory.Although China belongs the German civil law legal systems, but the securities legal system building borrow more Anglo-American common law, coupled with the rapid development in recent years, China's level of legal investor protection legislation is relatively high, but the contrary, China's securities market level still at a relative low level , the legal protection of investors can not meet the legislative. So we investigate the China's securities market law enforcement and found that China's securities enforcement did not include self-discipline of law enforcement, public law enforcement and civil enforcement mechanisms Trinity compensation, securities law-enforcement and regulatory are inefficiency. We further using the Event Study Methdology to do the empirical tests, test results showed that China's securities regulatory measures to protect our country far from to protect the interests of investors in our security market, securities law enforcement is low efficiency, which confirmed that the low level of law enforcement is the most important reason in Chinese low minority investors protection.In order to protect Chinese small investor's interest, first we have to further improve the level of investor protection legislation within the framework of civil law, issue "Investor Protection Act" and enhance investor legal concepts; Second To improve the efficiency of securities market law enforcement, we should integrate self-discipline , public law enforcement and civil compensation, establish incentive compatibility information disclosure system, provide insider trading private right of relief and strengthen law enforcement against stock market manipulation, to protect our legitimate rights and interests of middle and small investors and promote the development of China's securities market.