Legal Risk-Preventing For Investors Of CDR

DR,which is short for Depository Receipt,is a vehicle for trading in traditional foreign securities.Depository Receipts are negotiable receipts, which evidence the deposit of foreign securities.The first DR came out in the U.S.A in 1927,which is named American Depository Receipt(ADR) and it intents to evade legislation of foreign security trade.In early 1990s, some Chinese state-owned enterprise successfully raise a lot of fund by issuing ADR in American security market.Since then,we have concentrated more and more attention on DR.With China's entry to WTO, it's a duty for our country to open the capital market.As an important channel for foreign enterprise's entry to our capital market,CDR is on curriculum.The focus of this article is to discuss how to prevent the legal risks of CDR for investors.There are five parts in this article:The first part is the Introduction,which introduces the motivation of this article.As a vehicle of security market,they're a lot of risks in DR system.What's more,because of our country's policy,there are some special risks in CDR.Investor is the holder of DR,who is the driving force for the development of DR market.Usually,they are in weak situation and lack the capacity of preventing risk,so it is very important to protect their interests.The second part is Chapter 1,which analyses the legal relation of DR system,including subject,object,right and duty. The third part is Chapter 2.It analyses the general risks of DR and puts forward how to prevent them.The forth part is Chapter 3,which focus on the special risks of CDR and points out some measures in order to prevent them.The last part is the Conclusion,which summarizes the whole article. What's more,it points out that:on the one hand,CDR has to learn the experience of the developed countries;on the other hand,the process should be slow and steady,so as to protect the interests of investors.