On The System Of Shareholding Exercise Of China Securities Investor Service Center

China Securities Investor Services Center(ISC)is a corporate public welfare legal entity led by the SFC to help securities investors defend their rights.Many major shareholders or dongs,supervisors,high arbitraries of some listed companies,cover up their illegal facts in a legal form,and most of these problems belong to the scope of self-management of listed companies,the relevant departments and the general public groups generally can not directly participate in it.Coupled with the intensification of illegal violations in the securities field(such as insider trading,false statements,etc.),not only are the governance of listed companies facing a series of difficulties,but also the rights and interests of small and medium-sized shareholders continue to suffer serious damage.Shareholding system make ISC exercise shareholder rights to all listed companies in China by virtue of shareholder status(such as exercising the right of inquiry,voting rights,litigation to the court,etc.),so as to give full play to the utility of public welfare of ISC,that is,to provide unpaid rights protection services for minority shareholders and promote the standardized governance of listed companies.From the selective pilot to the comprehensive pilot,shareholding system of ISC has been carried out for nearly three years,which plays a great role in demonstrating the right to exercise,promoting the protection of rights,and supervising the governance of the company.But at the same time,its shortcomings are becoming more and more obvious.Although ISC is a corporate unit in the form of a company,its role shareholding system is not clear.Because it was set up by the SFC and under its direct leadership,the existence and operation of ISC are very similar to government agencies.However,ISC relies on the status of market-oriented shareholder in the shareholding system,not the public power.This,in turn,is similar to that of ordinary shareholders.In fact,in the shareholding system,compared to ordinary shareholders,ISC only holds 100 shares per listed company,and generally will no longer buy or sell shares,because ISC is not for the purpose of profit from the investment to hold shares,but to exercise shareholder rights.And the purpose of setting up a service center is to help investors to do their rights,and to promote the governance of listed companies.Therefore,ISC is a special general shareholder,that is,the public interest shareholderAs the executive body of the important innovative system of the system of shareholding exercise,the Securities Law does not explicitly recognize its subject qualification.And its power is based only on the pilot program and internal power system approved by the SFC,and there is no clear legal and regulatory support.Holding only the minimum required quantity(100 shares)of the shares,ISC have little saying when doing its right,and now there is no legal qualification and the basis for the right to do so,which leads to ISC repeatedly be questioned and misunderstood by listed companies.Therefore,it is necessary to give the relevant provisions of the public interest shareholders in the Company Law,and to clarify the main qualification of ISC in the securities field in the Securities Law,so that it can justifiably do the shareholding right.As a public welfare organization established specifically to safeguard the rights and interests of minority shareholders and promote the standardized governance of listed companies,ISC is much higher than minority shareholders in terms of professional knowledge and organizational ability.However,because of the limitation of the number and time of shareholding,ISC can only exercise the rights enjoyed by ordinary shareholders.The asymmetry of actual ability and authority makes the functional advantage of ISC be wasted.So,under the premise that the law recognizes the qualifications of the shareholding system of ISC,it is necessary to selectively give ISC shareholder rights without shareholding ratio and shareholding time according to the relevant provisions of the Securities and Futures Investors Center in Taiwan,China.In addition,because of the public welfare nature of ISC,when it uses litigation to safeguard the rights and interests of minority shareholders,it should also give relief to its litigation costs.In practice,the scope of application of the system of shareholding exercise of ISC is narrower.From the applicable object,including only companies listed on the Shanghai and Shenzhen stock exchanges,not other commercial subjects.From the content of the service,the main goal of establishing ISC is to help small and medium-sized shareholders to do and to protect their rights,and the specific measures of shareholding exercise of ISC are limited to questioning,suggesting,publicly speaking or filling a lawsuit against the listed companies.It is suggested that the New Third Board Listing Company should be included in the scope of application of that system.Under the direct leadership of government agencies,it is inevitable that there are defects in the independence of personnel for ISC.In addition,because of the nature of the public good,the daily operating funds of ISC are only derived from the state finance,it is impossible for ISC,to pay market-based remuneration commensurate with their expertise and high-intensity work to their staff and cooperating lawyers,and experts?etc.Therefore,according to the Securities market environment,it is very important to speed up the socialization transformation of ISC.At the same time,in view of the problem of unequal pay,it is suggested that external staff should be given recognition or corresponding priority and other means of incentive to make up for the financial gap.