Civil Liability Regime Of Securities Research

Through over twenty years' rapid development, China securities market hasmade great progress. It has improved the reform of investment and financingsystem, enlarged the scale of direct financing and solved the inadequatecapitalization problem of many state enterprises, promoted the industrialrestructuring and rationalization of social resource. At the same time, legislationsof regularizing the securities market, punishing and containing illegal activitiesare being enriched and perfected, especially the promulgating and enforcement ofSecurities Law amended in 2005, which plays an important role on furtherregularizing the securities market and guaranteeing the investors' legitimate rightsand interests. But undoubtedly, various illegal activities occurred from time totime and resulted in undue economic losses for numerous investors because ofthe less perfect securities law system and less powerful supervisory system. Inorder to protect investors' interests and safeguard their confidence to thesecurities market, legal liability, especially civil liability in securities law must bestrengthened and perfected.Civil liability in securities law means that the civil parties in securitiesmarket should burden the bad result, if they violate forbidden obligation in thecourse of issuing and trading described in securities law and regulation. Civilliability in securities law is the most important and direct protective means andremedy for the investor, after they sustain losses. One of the major reasons forthese securities frauds is lack of the civil liability system of illegal activities inChinese securities market. Because of attaching importance to regulating thesecurities market by public laws, looking down on and being short of regulatingthe securities market by civil laws, the serious shortcoming exists in civil liabilitysystem of securities law, in which insider trading, manipulation market, cheatcustomers and other illegal activities infringe upon the middle and smallinvestors' interests, which mainly bear the criminal and administrative liability.Protection of the rights and interests of the investors becomes an eternal subjectof the development of the securities market: The establishment of civil liabilitysystem for securities frauds will play an important role in protecting investors'interests and promoting the regular development of securities market.This thesis analyses and studies the system of civil liability in securities law by beginning with the general theory of the civil liability in securities law. Itanalyses the defects in Chinese system of civil liability in securities law and putsforward the advice of perfecting it. We should use the legislation and justiceexperience of most countries and regions in the world for reference. This thesisconsists of five chapters.Chapter 1 discusses the basic theory of civil liability in securities law. Itmainly states the concept, character, and function of civil liability in securities lawand discusses the relation among civil liability, criminal liability andadministrative responsibility. It also analyses the principle of the priority of civilliability.Chapter 2 analyses the nature of the civil liability in securities law andclassifies the civil liability parties of the securities, discusses their own regularprinciples in detail. Different liability parties have no responsibility principle offault, fault to infer the liability principle and fault responsibility principle todifferentiate suitably.Chapter 3 studies the system of civil liability in securities law in mostcountries in the world. It mainly, introduces the system of civil liability insecurities law in America, Japan and Taiwan Region. After analyzing the system,it brings forward experiments for reference.Chapter 4 analyses the present situation of civil liability in securities law ofour country. Firstly, it states the development situation and appraises the civilliability in securities laws and regulations of our country promulgated in differentstage. Secondly, it points out the oversight and lack of the civil liability system insecurities law of our country and analyses the reasons.Chapter 5 is designed to research realization of civil liability in securitieslaw in China and protection of the related system, which is discussed frommaterial guarantee system and procedural system. In order to construct andperfect China's civil liability in securities law, the following should be considered:1. build related material guarantee system, such as Capital Stock Insurance,Directors and Officers Liability Insurance, etc; 2. establish civil compensationfund of securities; 3. break through the established procedural system to set upclass action and cancel the preceding procedure of securities civil lawsuit; 4. formassociation to protect investors. Only perfect China's civil liability in securitieslaw can China securities market get further development and growth.