On The Exit Mechanism Of The Securities Company

Quitting System for Securities Companies (Quitting system) is an important mechanism to keep the securities market operating smoothly and effectively. However, there is no such a complete system in China's securities market now. The author analyzes the current models in China and introduces the western market experience in this article. The author hopes to provide some advice for building up a complete system in China.A preview and four chapters are included in this article. The necessity of researching on Quitting System is stated at the beginning of the article through introducing the current situation that securities companies face now. The first objective of the article is to provide the advice on setting up a legal framework for the Quitting System. The second objective is to be helpful to establish the competing system for securities companies. The third is to educated investors. The ways of thinking and writing involved in the article are also introduced.The first Chapter is the Basic Theories on Quitting System. Firstly, the author defines the Quitting System as the system that allows some securities companies to quit form market via some special procedural and channels. Then the author states that the Quitting system have two characteristics. One is to solve the problems, the other is to prevent the risks. Finally, the significance of building Quitting System is introduced. Building the Quitting System will be very helpful for the following four aspects: the development of securities market, enhancement of authority ability, improvement of securities companies and the protection of investors.The second chapter is the Remarks on the Current Quitting Models in China. Now securities companies quitted from capital market via three methods, which are custodian, administrative custodian and dismissal by authority. Detailed research on those three models is involved.The third chapter is the Quitting System Comparison between China andWestern Markets. Much difference between the two kinds of markets is stated, especially on the following three aspects: the ways of quitting, the legal framework and the supplementary systems. Firstly, the Quitting System in China replies on administrative strengthen more than economic market mechanism. Secondly, China's legal framework for Quitting System is not as complete as the framework in western markets. Thirdly, supplementary systems in China are not complete. In this part, the author emphasizes that supplementary system is an individed part of Quitting System. Chapter two and three are the key parts in the article.The forth chapter is the Advice to China. The author thinks the most important measure for China is to set up the bankruptcy mechanism for securities companies in the market. During the process, more attention should be paid on establishing a complete risk-control system.