Securities Market Exit Legal Systems

Securities　firms　play　a　very　important　role　during　the　development　of　Chinese　securities　market.　　In　the　last　few　years,　some　securities　firms　which　were　greatly　troubled　for　operation　failures　withdrew　from　the　market　through　administrative　closing,　taking　over　and　trusteeship　by　the　regulatory　authority.　　But　up　to　now,　there　hasn't　been　a　set　of　legal　procedures　to　deal　with　market　withdrawal　of　securities　firms.　　It　becomes　fairly　urgent　to　improve　the　legal　mechanism　of　securities　firms　withdrawing　from　the　market.　This　paper　begins　with　an　introduction　of　domestic　situation　and　legislation　of　market　withdrawal　of　securities　firms.　　It　then　makes　an　international　comparative　analysis　in　order　to　absorb　experiences　abroad.　　The　author　proposes　regulatory　framework　of　market　withdrawal　as　a　mechanism,　including　principles,　ways　and　procedures,　and　finally　makes　further　discussion　on　several　concrete　systems　of　legal　mechanism　which　should　be　constructed　or　improved.　This　paper　includes　four　chapters,　emphasizing　on　the　latter　two　chapters.　Chapter　one　firstly　explains　the　definition　of　market　withdrawal,　including　compulsory　and　voluntary,　with　further　analysis　on　particular　characters　compared　with　ordinary　enterprises.　　On　the　bases　of　introduction　of　the　current　practice　of　market　withdrawal,　the　author　points　out　the　defeats　of　the　legislation　of　market　withdrawal,　and　finally　gets　a　conclusion　to　improve　the　legal　mechanism　of　market　withdrawal.　　Chapter　two　explains　the　international　regulatory　principles,　with　emphasis　on　prevention　of　systematic　risk.　　The　author　introduces　related　legislation,　risk　forewarning　mechanism　and　investor　protection　system,　and　sums　up　several　experiences　abroad　which　are　helpful　to　improve　Chinese　legal　mechanism.　Chapter　three　is　mainly　about　the　framework　of　market　withdrawal　as　a　mechanism.　　The　author　firstly　proposes　four　legal　principles,　which　are　market-oriented,　dealing　by　classification,　minimizing　costs　and　investigating　responsibility.　　It　is　suggested　to　construct　risk　forewarning　mechanism　and　choose　different　ways　to　withdraw　accordingly.　　On　the　basis　of　analyses　of　three　ways　to　withdraw,　the　author　recommends　to　promote　merger　&　acquisition　by　the　market,　to　improve　administrative　closing　system　and　to　construct　bankruptcy　system.　　It　is　suggested　to　empower　the　regulatory　authority　by　law　and　enforcement　procedures　to　be　regulated.　Chapter　four　makes　further　discussion　on　concrete　systems　of　legal　mechanism.　　The　author　suggests　determining　the　standard　for　securities　firms　to　withdraw　from　the　market　which　focus　on　net　assets.　　To　improve　bankruptcy　legislation,　the　paper　makes　discussion　on　bankruptcy　liability,　application　qualification,　recall　right　of　clients　and　particular　procedures.　　And　also　several　coordinative　systems　are　suggested　to　constructed　or　improved,　including　clients　clearing　funds　isolating　system,　investor　protection　system　and　investigating　responsibility　system.