On The Warranty Liability Of Sponsors

In February 2004, the domestic securities market officially introduced the sponsor system. The sponsor system is aimed at strengthening the sponsor's liability to make it perform its duties honestly and diligently, and recommend qualified companies to issue stock. The liability system of our present sponsor system emphasizes administrative penalties and lacks of the matching investigation mechanism of civil liabilities. The warranty liability of sponsors is the most important of the civil liabilities of sponsors. So, doing some research on the warranty liability of sponsors is very necessary. The warranty liability of sponsors is the joint compensation liability undertaken by sponsors when the listed company's information disclosure acts violate laws and regulations and cause losses to investors. The warranty liability of sponsors is neither the liability for breach of contracts, nor the tort liability. It is an independent liability set by Securities Laws of our country. Making the sponsor undertake the warranty liabilities should assume the sponsor has the real right, and it has substantial discretion on whether the applicant meets the conditions for issuing and listing. The value of sponsor's warranty liability includes the purposeful value and the instrumental value. Both of them depend on each other. The purposeful value of sponsor's warranty liability is guaranteeing the freedom and fairness of investment, maintaining the order and safety of securities market and accelerating the development of domestic securities market. Its instrumental value is reflected in weakening the negative impact caused by information asymmetry and using reputation incentive mechanism and payment incentive mechanism to encourage sponsors to perform their duties more honestly and diligently. The warranty liability of sponsors adapts the fault presumption principle, and the elements of fault liability are applicable for it. But defining the causal relationship between damage facts and illegal behaviors should adapt American"fault-on-market theory"and"trust presumption principle", and should also assume the sponsors have subjective fault at first. If the sponsor could prove itself haven't any subjective fault, it needn't undertake the warranty liability. In order to define the civil liability boundary of sponsors accurately, we should do some research on the civil liability allocated among the sponsors, the securities regulators, the other service-offering agencies and so on. Owing to lacking of judicial resources of our domestic securities market, we should make the best use of reconciliation and mediation and administrative decisions to solve the sponsor's warranty liability. And at the same time, we can introduce the class action to perfect the implementation mechanism of sponsor's warranty liability. Finally, about the social sharing of sponsor's warranty liability, we can establish a sponsor association, found a sponsor fund, and carry out a liability insurance system of sponsors. By taking all these measures, it can scatter the risk of sponsors, enhance the sponsor's ability to resist risks, and guarantee the warranty liability of sponsors realized really and smoothly.