Study On Legal Protection Of Individual Securities Investors

Securities Investor Protection is a very important issue. A large number oftheoretical and empirical research shows that a country or region which have higherSecurities Investor Protection level, their securities markets would be more developedand more capable to resist financial risks. However, in modern society, investors,though they have the legal, business contract agreed upon a series of rights, but thesubjective rights are often marginalized or violated. Especially in the "capital ofmajority" principle, a large number of dispersed individual investors transfer the rightto the controlling shareholder, and thus can not form effective corporate governance,supervision. Individual investors are in a weak position in the company, in fact,dominated by controlling shareholders.At present, the legal system of the legitimate rights and interests of individualinvestors in China is far from perfect, which makes long-term interests of individualinvestors unprotected. How to effectively build for the Chinese legal system related tolisted companies in China, the financing channels of communication open, related tointernal investors and listed companies in China to balance the interests of outsideinvestors, related to the stable development of China’s securities market, related to thesustainable growth of China’s macro economy. Compared with the centuries-oldmature foreign markets, China’s securities market is still in the early stages of growth,so the investor protection issues in China has more practical significance.This paper analyzes the United States, Britain, Germany, Japan, the developmentprocess of this four national securities markets and securities investor rightsprotection system has evolved, and some mature legal system separately, detailedcomments. Through comparative analysis, summed up China’s investor rightsprotection system, there are several major deficiencies: irrational ownership structureof listed companies, state-owned shares, company shares due to the dominance,leading to individual investors without the right to speak; GEM is currently a lack ofmarket exit mechanism, the stock market can not play the role of survival of the fittest,not to improve the overall quality of listed companies; emphasis on China’s securitiesregulatory administrative supervision, administrative supervision over leadresponsibility for monitoring and inefficient; civil institutional arrangements, makingthe cost of individual securities investors rights too large, reducing the rights ofinvestors’ enthusiasm; information disclosure system defects; less dividends of listed companies.To solve these problems, China needs to: continue to reduce state-owned shares,further develop and expand the number and strength of institutional investors, listedcompanies control the formation of effective competition in the market; theestablishment of companies listed on GEM direct exit system to give full play to therole of stock market survival of the fittest, improve the overall quality of companieslisted on GEM; the part of the regulatory functions assigned to the securities industryself-regulatory organization, to reduce the burden on the SFC, the high efficiency ofsupervision; perfect information disclosure system of listed companies; mandatorybonus system by means of regulation and taxation, to encourage listed companies todividends. Hope from the above six areas, improve China’s protection of individualrights and interests of securities investors the legal system for securities investors toprovide a just, fair and transparent market, reduce systemic risk and improve capitalefficiency, so as to maintain investors’ legitimate rights.