Sponsor System Studies And Construction Of China's Securities Market Integrity

The introduction of sponsor system is a revolutionary transformation for securities issuing and listing scheme and a key step for good faith construction in China stock market. Sponsor system originated in Britain and developed in Hong Kong. It was usually applied in Growth Enterprise Market. As there was no precedent of introducing sponsor system into foreign Main Board Market before, its successful introduction to China Main Board Market could be considered as a pioneer action.The sponsor system which has been set up in China considers actual situations about China stock market, summarizes useful experience since the time of the implementation of approval system, confirms obligation framework of issuing and listing scheme and establishes liability confirmation and realiTation mechanism, providing a more marketable framework for the sustainable, stable and healthy development of capital market, and the good faith construction of China stock market.Based on the current situation of the lack of good faith in China stock market, this thesis discusses the substantial significance of sponsor system to the good faith construction of China stock market. For the sake of making this thesis more logical and persuasive, Part one and Part two give special concern on the deep analysis of relevant theories on sponsor system, making the thesis itself not only full of practical values but also supported by theoretics.This thesis is divided into four parts:Part one is mainly about the expounding ofthe basic theory of sponsor system.First of all, sponsor system means that sponsors take charge of recommending and tutoring issuers, verifying the factuality, accuracy and integrity of issuing and listing papers, assisting issuers by establishing strict disclosed information system and assuming venture liabilities. They should also continue to help the issuers to set up normative artificial person governing structure during the regulated time after these companies are listed. Furthermore, sponsors must supervise and urge the listed companies to conform to stock market regulation and fulfill the commitment in the prospectus, and at the same time, they must take joint assurance liabilities for the false disclosure of information by issuers or listed companies.Sponsor system has three core elements: sponsor, the subject of sponsor and sponsorship. The three legal characters of sponsor system include: strict conditions of qualification, continuation of sponsor liabilities, and rigid supervision measures and legal obligations.Then, this thesis deals with historical evolution of sponsor system, which rooted in Britain and developed in Hong Kong. Now it is universally applied in the United States, France, Germany and Canada.that, this thesis makes a further step to find out reasons why sponsor system generate& We find that the direct reason is the high venture of stock market and the fundamental one is the problem of unsymmetrical information prevalently existing in stock market.At the end of this part, the thesis retrospects four stages of the historical evolution of stock issuing and listing system: 1)quantum index management under examination system, 2)number index management under examination system, 3)channel management under approval system, 4)sponsor system. These stages indicate that China issuing and listing system is becoming more mature which will form a solid basis for the realization ofregistration system in the future.Part two mostly discusses legal values of sponsor system and legal theoretical basis in civil law during the process of designing the system.The equity value means that sponsor system can improve the quality of disclosed information and defend the interest of common investors. The security value is showed by strengthening assurance duty and administrative supervision function.The agency and assurance theories in civil law form the basis of sponsor system. This thesis compares sponsor system with the two theories and summarizes their common and different places, giving prominence to sponsor system's unique characters and values.Part three deals with the connection between sponsor system and good faith construction of China stock market.As the core part of the whole thesis, this part firstly analyses good faith principle in civil law as theoretical basis. Then, from the current situation of the lack of good faith in China stock market, it profoundly analyses reasons why the situation exists, including the insufficiency of safety-defending mechanism of intermediary organizations, the shortages of disclosed information system and the deficiencies of artificial person goveming mechanism. There follows the conclusion that only by perfecting sponsor system in China stock market can the good faith construction be finally completed.Part four talks about the specific measures to perfect sponsor system, which is based on British and Hong Kong's relevant regulations.These measures are expounded from two angles: issuers and sponsors. Firstly, obligations system of good faith for controlling shareholders must be established and the independence of sponsors must be ensured. Secondly, sponsors' liabilities and responsibilities mechanism and supervision and restriction system for intermediary organizations must be founded.