Legal System Of Securities Investor Protection Fund

Since the June 2001,influnced by the "split share" and other institutional factors,China's capital market had entered a period of adjustment up to five years.During this period,the securities industry caught in the plight of industry losses.Many securities companies managed by other financial institutions for the irregular operations and the insolvent.This is a serious blow to investor confidence,also shows that the shortcomings of weak awareness of risk prevention and improper risk control measures of our brokers.In order to maintain the confidence of the investors and securities market,China promulgated "the Administrative Measures on securities Investment Protection Fund" on June,30,2005,and established the Securities Investor Protection Fund and set up China SIPF Co.,ltd.,responsibility for the operation of the Fund.This indicates that the formal establishment of China SIPF system.Although SIPF system as an important system to protect investor has experienced more than four decades of development,it still a new thing in China.The provisions of "Management Measuresare" too principled and lack of maneuverability.Thus,by drawing the successful experience of the Unitied States,Canada,UK,HongKong,TaiWan and other countries and regions,and combining with the situation of China's securities market,and proposing the solutions by expedition of the issue of the functions of the protection Fund company, go vernance,protection Fund rasing,management,use and other aspects.Then the operation of the Fund will from incentive and restraint mechanisms to securities companies and investors and the function of the Fund to play correctly.In that way,the SIPF will become the long-term mechanism to maintain stability and development of securities market.