The Research Of Our Sponsor Legal System In Issuance Of Securities

Nowadays, financial market develops rapidly. Lots of emerging and high-techindustries which have great market prospect and growth potential are making equitytrading to be stronger. But these small industries mostly have a short timemanagement, it has high-risk for investors who stand in a situation with unequalinformation.Therefore, sponsor legal system emerges as the times require in GrowthEnterprise Market to prevent and avoid risk. The sponsor system originated fromEngland and developed in Hongkong. China has been applying with sponsor systemin2004and sponsors are indispensable to our securities market. On the one hand,sponsors recommend and tutor industries who are going to apply for listing.On theother hand, they supervise and reveal the industries’ behavior and have to bear jointliability. Sponsors need to deal with the problems of unequal information betweeninvestors and stock issuers to protect investors’ interest.We applied with sponsor system in2004.<The measures for the administrationof the issuance and listing of securities business>was enforced on June14th,2009which had been considered by China Securities Regulatory Commission(CSRC) in2008.This is an important legal norm of the sponsor system in China. But many majorillegal cases emerged in an endless stream since2004. More and more sponsors havebeen punished by CSRC. Some recommendation representatives have lost theirqualifications of recommendation. We could find obviously that the sponsor systemneeds to be improved and perfected.This paper analyses the current status of the implementation of the sponsor systemby expounds the concept and the value of the sponsor system. Try to proposeproblems in our stock market and find legal perfection of sponsor system in ourcountry by combining with the experiences come from other countries. This paper hasfive parts. First, we expound the concept and the value of the sponsor system. Second,to analyse the experiences in UK, Canada, Hongkong and America. Such as the"lifelong sponsor" system in UK and "mixed" sponsor system in America have playeda great role in stock market. Third, to make an overview of China’s sponsor system, introduce the evolution mode of our securities issuance, to elaborate thecharacteristics and types as well as sponsor responsibility system. Due to theparticularity of our market environment, we originally came from endorsementsystem to current sponsor system under the stage of approval system. Forth, to listsecurities cases in recent years and to analyse the reason of the problem. According tothe typical cases occurred, such as certification system of sponsor is not reasonable,the period of recommendation is relatively short, the lack of civil compensationmechanism. Fifth, to use multi-disciplinary knowledge to improve the legalcountermeasures of sponsor system in our country. Such as making qualification testof sponsor more strictly. To improve accountability mechanisms and extend theperiod of recommendation. Try to perfect the civil compensation mechanism andestablish a risk fund.