An Empirical Research On The Legal Regulation Of The Securities Market Manipulation

To strengthen the decisive role of the market in resource allocation, on the onehand China should reduce the government intervention, on the other hand it isimportant to prevent anyone from manipulating the market. The phenomenon ofsecurities market manipulation is very serious in China for many years. Although therelevant laws changes frequently, the effect of enforcement is unsatisfactory.Under the theory of incomplete law, this paper undertakes an empirical researchon the situation of China’s legislation and enforcement in securities marketmanipulation, by analyzing CSRC’s relative decisions for administrative penaltyfrom1992to2014. The empirical findings show that the law and rules onmanipulation have a low degree of standardization and fail to allocate residuallawmaking power clearly, besides, the behaviors of securities market manipulation inChina are always accompanied by utilizing other’s accounts to undertake anysecurities trading, which all have badly affected CSRC’s anti-manipulationenforcement. Besides, our country’s scholars’ cognition about the relationshipbetween the manipulators’ unlawful proceeds and civil compensation system is notreasonable, which is bad for the establishment of civil liability system in securitiesand the connection of public enforcement and private lawsuit.To solve these problems, the paper advises that the law of securities regulationfirst need to increase the degree of standardization; secondly, the law shouldexplicitly allocate residual lawmaking power to CSRC with relative rules; thirdly,the law need to ban the behavior of utilizing others’ accounts; finally, the amount ofcompensation should be based on the investors’ loss and the civil compensationsystem should be established in coordination with the existing system.