The Study On The Civil Compensation Fund System For Securities

Since the reform and opening up, China’s securities market has been greatlydeveloped, which stimulated the development of China’s socialist market economy to agreat extent. Economic laws and regulations gradually improve and perfect capitalmarkets prosperity. There are still many shortcomings in terms of the protecting theinterests of investors. In the aspect of investor protection, the regime focuses onadministrative liability and criminal liability, but ignores civil liability, which makes thedamage to the interests of the investor’s investment with very rare effectivecompensation. And some investors even do not know the damage to their own interests,let alone go to the claim. Even if they know their own investment interests damaged, itsclaims process is lengthy, causing the cost of rights quite high. In this case, someinvestors even directly abandon this interest, which greatly damaged the confidence ofthe investor’s investment. In order to restore the confidence of investors, and to ensurethe orderly operation of the securities market, there is an urgent need to establish andimprove the system of securities civil compensation fund.With the continuous development of global economic integration, it’s a must tohave the internationalization of securities transactions, securities issued, securitiesregime, securities market and also the capital. In the capital markets，a country can nolonger rest on its laurels, blindly close the border. It must concerned about the all thedevelopment trends in the international capital markets. Looking at the securities lawsof the world’s major developed countries and regions, they mainly treat the securitiescivil compensation fund system in securities trading as an important one. Offenders inwestern countries scare the civil compensation rather than administrative fines orcriminal liability. The criminal can be released on parole; civil liability can make himlose the family fortune, all reputation, and even spiritual compensation. Civil liability isa small cost control measures. Imprisonment and other penalties are only given tooffenders with no ability to pay. In order to speed up the pace of internationalization ofChina’s securities market, our country will inevitably draw on the legislative experienceand judicial practice of other countries, establish and improve the system of securitiescivil compensation fund. The international integration, which the investor protects, hasan important reference under the conditions of international coordination of financialmarkets in the future. So it’s multifunctional and long-term to establish such a system.Of course, the establishment and perfection of this system is not achieved overnight, but a systematic project, which requires all aspects of cooperation and joint efforts.In the establishment and improvement of the securities civil compensation fundsystem, the thesis focused on the specific operation of the fund system. Therefore, thethesis offers a detailed discussion about the audit of compensate object andcompensation reason, and the construction of compensation procedure; makes relevantrecommendations, specific analysis and solutions; then analyzes securities civilcompensation fund system from the level of the law and economics. In order to analyzethe economic attributes of the securities civil compensation fund system, it’s a goodway to have a deep understanding of the characteristics of the securities civilcompensation fund system from the perspective of law and economics. The thesisrecognizes that the most important aspect of perfecting the fund system lies in theimplementation of the fund system, thus, recommended a number of security measuresto protect the operation of the system. Of course, the implementation of these measuresis the essential part to make the system operate effectively. Establishment andimprovement of China’s securities civil compensation fund system is a great safeguardof the development of China’s capital market. The investors’ interests being maintainedwould naturally raise confidence in the capital market, as investors will be activelyinvolved in the securities market investment and the operation of the securities marketwill be more and more efficient. In addition, the Securities Investor Compensation FundSystem can not solve all the problems about the protection of the investors’ interests.The protection of the interests of investors has to rely on the coordination and thesoundness of investors’ self-protection, industry self-regulation, the governmentregulatory system and so on. This thesis discourse on how to protect the interests ofinvestors from the aspect of the establishment and perfection of the securities civilcompensation fund system. As for the other aspects of the system, they are also worthexploring.