Study On The Administrative Penalty System Of Securities Supervision

With expectation of protecting interests of investors better, more and morescholars focus on the research of civil compensation of Securities Litigation. Bycontrast with civil compensation, there are only a few works regarding administrativepenalty in terms of securities. Combining with practice of securities in our country,the author believes that various difficulties would emerge if we promoted civilcompensation of securities litigation rigidly. In fact, it is impossible for us toovercome these difficulties within a short period of time. So, restatement ofadministrative responsibility regarding securities is of great significance. Byanalyzing the written decisions of administrative penalty issued from2007to2010,the author finds the fact that China Securities Regulatory Commission (hereinafterreferred to as “CSRC”) gradually intensifies the efforts of penalizing insider trading.Even so, insider trading is still pervasive and has become chronic illness in securitiesmarket.Based on researches of a lot of scholars and with the consideration of situation ofsecurities market in China, the author elaborates administrative penalty in terms ofsecurities has unique superiority in terms of protecting interests of investors from theperspective of necessity of introducing administrative responsibility regarding securities. So, we should make full use of effectiveness and function of this system.This thesis focuses on problems regarding administrative penalty against insidertrading. In order to deter offenders and protect investors, the author tries to putforward legislative suggestions of administrative penalty regarding insider trading insecurities market to perfect legislation in this field by adopting methods of empiricalresearch and comparative analysis.Chapter1: The overview and overall understanding of administrative penalty insecurities supervision. The centralized and unified supervision mode in securitiesindustry decides the importance of administrative penalty.Chapter2: Discussion in respect of necessity of administrative penalty insecurities supervision. At the beginning, by analyzing the phenomenon of “fever ofresearch on civil compensation of Securities Litigation”, the author believes thatsecurities litigations for civil compensation are confronted with various dilemmas,which could not be solved within a short period of time. In the second part, the authorreaffirms dominant position of administrative ability in Securities Law and highlightadvantages of administrative penalty, which are unparalleled to securities litigation forcivil compensation, especially in aspects of maintaining the order of market andprotecting interests of investors.Chapter3: By analyzing written decisions of administrative penalty issuedpublished from2007to2010, the author illustrates overall situation of administrativepenalty against insider trading in our country through empirical research method andfive problems as following in terms of administrative penalty against insider tradingare summarized: firstly, the threshold of evidence is too high for insider trading;secondly, the penalty is not severe and the mode of penalty is not multiple; thirdly,independence of CSRC and resources of enforcement are in shortage; fourthly,mechanism of information disclosure is not perfect; fifthly, lack of externalsupervision and awarding system and the incentive of protecting investors is notstrong enough.Chapter4: Suggestions on perfecting administrative penalty against insidertrading. Based on the previous analysis, the author believes: the threshold of evidencing insider trading should be moderately reduced; effort of penalizing shouldbe intensified and various methods of penalizing should be combined scientifically;legal status of CSRC should be clarified; internal control of enterprises should beperfected and mechanism of information disclosure should be improved; investorequity fund, which will be used to stimulate the public to participate the fight againstinsider trading, should be established.