Research On China Securities Investment Protection Fund Compensation System

In response to systemic risk in the securities market, countries established the securities investor protection fund to inspire market confidence and protect the investors. In the process of the securities investor protection fund operation, the compensation system has played a key role. China has established the China Securities Investor Protection Fund Corporation Limited in2005. But there are many deficiencies in protection fund compensation system responsibility legislations. The deficiencies will shake the legal basis for the protection fund operation, and interfere with the normal functions of protection funds.The first part of the article introduced systemic risk and moral risk to define the value and aim of the protection fund and its compensation system. The second part gives many deficiencies of the compensation object, scope, limitation, process through the method of law hermeneutics, comparative law, empirical research method of law. More specifically, they are vague compensation object, the big scope of compensation, the lack of limitation and the cockamamie compensation process. At last, the article gives corresponding countermeasures with the analysis of foreign legislation experience and China’s economic and social situation.