Study On The Special Fund For Investors' Interests Compensation System

In recent years,the fraudulent issuance cases such as false statement have often happened in the stock market.The listed companies and sponsors shall ensure the authenticity and integrity of the information disclosure documents,but they committed false statement and fraudulent issuance,which damages the legitimate interests of investors,seriously hits their confidence,and affects the stability of the securities market.Therefore,China Securities Regulatory Commission plan to set up the advance compensation system and establish a special fund for investors' interests compensation.When the investors suffer losses in false statement or fraudulent issuance cases,the related sponsors or controlling shareholders of the listed companies shall set up the special fund to compensate the investors in advance and then claim to other parties by law for recovery.The system can effectively restrain the fraudulent issuance behavior and strengthen the protection of investors.Wanfu Biotechnology case and Hailianxun case are the only two cases which set up the special fund for investors' interests compensation.In the cases,the responsible parties compensated the investors for their losses due to false statement in advance before the conclusions decided by CSRC or the court,who would try their best to protect the investors‘ interests and maintain stability of the securities market.Based on the Case Wanfu Biotechnology and Case Hailianxun,this article conduct a research on the specific implementation and the problems of the special fund for investors' interests compensation in the advance compensation system.This thesis consists of introduction,text and the conclusion the body is composed of three chapters.The introduction mentions that CSRC required establishing the advance compensation system of sponsors and setting up a special fund for investors' interests compensation,which play a necessary role in the development of Chinese securities market.Although there are little theoretical literatures and practical cases which are closely relevant to the special fund in the advance compensation system,the study of this system is not only of practical significance but also of innovation.For the same reason,the study in this article has inevitable imperfections.The first chapter describes the advance compensation system and the special fund for investors' interests compensation.Firstly,it gives the definition of advance compensation system,and clarifies that this system has no clear rules in the securities law and is only regulated in regulatory documents with lower level like Prospectus.Moreover,there are few cases in the practice except for the Wanfu Biotechnology case and Hailianxun case which set up the special fund for investors' interests compensation.Then,the chapter mainly studies the concept and characteristics of the special fund for investors' interests compensation,and declares that the fund can effectively restrain the fraudulent issuance behavior and also make up the shortcomings of traditional administrative and judicial relief,so as to protect the interests of investors and maintain the stability of the securities market.Finally,it analyzes the relationship between the advance compensation system and the special fund for investors' interests compensation in the perspective of system philosophy,arrangement and practice,and concludes that they are inherited from one to another,organically linked and mutually complementary.The second chapter mainly introduces the present situation and problems of the special fund for investors' interests compensation.First of all,combined with the specific practice of Wanfu Biotechnology case and Hailianxun case,it introduces and analyzes the calculation dates and range of the loss in the compensation and the management of the special fund,and also summarizes the operation principle of the special fund based on the practice.Then,it focuses on the analysis of the unsolved problems in the special fund for investors' interests compensation,including the imperfect legislation problem,the scope of the fund's main body,the legal agent right and the compensation recovery problem,the classification of the impaired investors,the effectiveness of the advance compensation agreement and the investors' choice right problem,and a series of problems from the fund establishment,financial source to the compensation scope in the operation of the special fund.The third chapter gives suggestions about the establishment of the special fund for investors' interests compensation.Firstly,from the legislative point of view,it is necessary to clarify the legal status of the special fund and to provide the corresponding supporting measures.Secondly,the rights and obligations of the funds' main body must be clearly regulated,considering the scope of the fund's main body,the legal agent right and the compensation recovery problems.Thirdly,by analyzing from the perspective of the effectiveness of the advance compensation agreement and the investors' choice right,the investors' interests can be better protected.Finally,some legislative proposals on the fund establishment,financial source and compensation scope are also given in order to regulate the operation and management of the special fund.In the conclusion,a brief summary is made from a general view.