A Research On The Regulation Of Sponsor's Lawlessness

The Sponsor Regime began to board stage in 2004 officially.This regime,which achieved remarkable results beyond the borders,has been highly anticipated by the regulators,investors and intermediaries since its debut.Hitherto,the Sponsor System in our country has gone through seven years.Scandals like Jiangsu Qionghua Events,Suzhou Hengjiu Events and Xietianhua Case illustrate the improvement of the issuance of securities institutions which takes the Sponsor System as core and accountability mechanisms.It has been an important issue related to the healthy development of securities market in our country that how to inquire deeply into the weakness under the surface and that how to have the present Sponsor System optimized.Based on the collection and induction of cases,and the introduction of foreign laws and regulations,as well as scientific theories,this paper analyses the widespread problems in our country's securities issuance market,and puts forward suggestions to govern sponsor's delict pertinently.The paper is divided into the following four parts.In the first part,there are six typical cases,including Jiangsu Qionghua Events,Suzhou Hengjiu Events,Shengjingheshan Events,Kemian Wood Events,Lishaowu Case and Xietianhua Case.According to the nature of the sponsor or the sponsor representative,these cases can be divided into two categories:one is the sponsor or the sponsor representative breach their responsibilities;the other kind is the lawbreaking acts they do,basically the scandals that they use their positions to do insider trading in the investment bank.A simple analyse through the two kinds of problems provokes a thinking about the Sponsor Regime in this country.In addition,the background and theory of the Sponsor Regime's foundation are retrospected,and the significance and imperfection are prospected.The breach actions of the sponsor and the sponsor representative are focally expounded in the second part.By quoting and concluding the main laws,for instance,Securities Act and Securities Issuance and Listing Sponsor Business Management Approach,the sponsor's legal duty is clear and definite,which includes due diligence,guidance and recommendation and continuous supervision.Afterwards,the further analyse of the cases summarizes the specific phenomenon and feature when the sponsor and the sponsor representative breach their duties,in order to excavate deep problems.The third part represents common corruption in the investment banking sector.Some common methods in which the staff does insider trading and serious detriment to securities market can be induced during the description of Lishaowu Case and Xietianhua Case.The corruption in our country's investment banking sector is so grave that it becomes an accustomed but sanction-free hidden rule.Actually,this indicates institutional weakness of our sponsor market.Such as the excessive lack of sponsor representative caused by irrational admittance mechanism so that huge rent-seeking space connives.The forth part studies comparatively on the prevention and punishment of lawlessness according to the systematic analysis of two kinds of lawbreaking actions above.Specifically,the laws and system structure about the sponsor's practice capabilities in US,UK and Hongkong,encouraging the sponsor to perform duties,devising complete duty regime for the sponsor,and preventing the sponsors from insider trading are cited to compare with present laws in our country,then find overseas advanced system's good use for reference of regulating the sponsor's lawlessness in our country.In the fifth part,the origin of the sponsor's lawlessness in our country as well as overseas related systems are taken advantaged to propose the suggestion of improving the system to prevent the two kinds of illegal actions in the sponsor market.