Legal Research On The Organization Form Of Chinese Stock Exchanges

Though in accordance with related laws and regulations,General Assembly of Members is the supreme authority of Chinese stock exchanges,it has stopped functioning for a long time.In the meanwhile,General President,Chairman and Vice Chairman are directly nominated by CSRC,which means the daily management constantly run by Board of Directors and President is strongly under the influence of CSRC.Therefore,the organization form of Chinese stock exchanges is separated into nominal and substantial form——the nominal form is Membership System and the substance is semi-governmental organization administered by CSRC.The current status that Chinese Stock Exchanges are semi-governmental organization is always criticized by the scholars for which leads to the lack of independence of Chinese stock exchanges.However,the separation between nominal and substantial form aims for meeting various requirements of institutional environment and reality.The existence of substantial form has its rationality.The nominal form resulted from the imitation of the main stream organization form of the stock exchanges in the world to enhance the legitimacy of new-born Chinese stock exchanges in 1990 s.The substantial form shall response to the relationship between local and central government,government and market.The game between central and local government on the management of the stock exchanges could be observed by the mutual competition between the Shanghai and Shenzhen Stock Exchange,which are under the management of Shanghai and Shenzhen government from 1990 to 1997.The competition shows that the local governments are more care about the size rather than the quality of the securities market,which results to negative events occurred due to deregulation of the market participants.These negative events also prompted the establishment of CSRC and CSRC to collect the regulatory power from the local governments.The comparison of securities development experience between the Czech Republic and Poland tries to elaborate the relationship between government and market in transition economies: different from the securities market naturally developing in the U.K.and the U.S.,transition economies created the securities market by the government,which calls for a powerful administrative regulatory organization and laws stipulating information disclosure maintaining high standard.What's more,powerful administration has influence on the organization form of stock exchanges.In Poland with strong governmental regulation,Warsaw stock exchange is also owned by state,which reveals an alternative organization form different from Membership System or Company System.The alternative organization form of Warsaw Stock Exchange also proves the rationality of the substantial form of Chinese Stock Exchanges.