Study On Legal Problem Of The System Of Advance Payment In Securities Market In China

Especially small and medium investors,It is regarded as an important indicator,the perfection of the legal environment,that the degree of protection of the profits of investors in the securities market.All kinds of violations have always been associated with the development of the securities market in practice,and constantly changing and refurbishing.False statements and fraudulent issuance are common crimes in the securities market and will seriously damage the profits of investors.Judicial assistance is the last barrier to the remedy of investors.At present,however,the civil compensation litigation mechanism of China’s securities investors is still not perfect.Securities civil litigation has trouble with long periods,high costs,complex proof procedures,and difficulty in claims,etc.The time and economic costs of civil compensation from various judicial channels are relatively high,and the motivation for investor litigation is relatively insufficient.Recently,the upfront payment system implemented by Ping An Securities in Wanfushengke’s financial fraud case has created a precedent for China’s upfront payment system,and the Hailianxun financial fraud case and Xintai Electric fraud distribution case have also adopted sponsors,which provides a new channel for investors to get economic compensation at a low cost and approve from investors,markets,and regulators.This paper bases on the prepayment payment practice of three cases to analyze the advantages and theoretical basis of the prepayment system,and proposes an institutionalized proposal;at the same time,it puts forward a good idea under the problems and lacks in practice.In addition,it has also compared some similar fair-fund systems to which in the USA,analyzing the similarities and differences between the two,and the fair-funding system can also provide some references for comparison.The full text is divided into three parts: the introduction,the main body,and the conclusion.The main body is divided into three chapters.The main contents are as follows:The first chapter introduces the case of Wanfushengke financial fraud case,Hailianxun financial fraud case and Xintai Electric fraudulent issuance case,and the application of the CSRC on the punishment and prepayment of all responsible entities in these three cases.Next,this part analyzes the relevant rules and legal relationships for the upfront payment from the seven aspects of fund contributors,fund managers,fund custodian banks,fund size,compensation plans,and whether to support investors in other ways to receive remedies,operating hours and phases,the elements of the fund for early-stage reimbursement.Finally,it introduces the effectiveness and evaluation of the fund.The second chapter analyzes the theoretical foundation and problems of the prepayment system.The theoretical basis of the prepayment system is to help resolve the difficulties of litigation claims,facilitate investor protection,increase the cost of illegal securities,and maintain the order of the securities market.And it analyzes the problems existing in the current prior payment practice from four aspects,the urgent need to form an institutional system,the less source of compensation funds and the claimant is difficult to recover,the fairness of the compensation plan and the lack of investor’s choice of rights,and the evaluation of the fund’s lack of performance.The third chapter compares China’s prepayment system and the US fair fund system.It is the guarantee,for the formation of a sound institutional system and efficient operation of the equity fund system,that explicit regulations of the law and the establishment of actual operational norms by the regulatory authorities.Then the part puts forward the proposal of perfecting the prepayment system.Introduce insurance compensation into funds and under certain conditions refer to the “Priornotification of administrative punishment” of the CSRC and supervise all responsible entities to jointly fund the establishment of funds.Secondly,give priority the right to give priority to compensation.Thirdly,protect the payment plan to establish fairness through the introduction of third party agencies to monitor the formulation of compensation plans,the introduction of small shareholders and agents of small and medium investors to participate in the formulation of compensation plans and other measures.Fourthly,investors can be guaranteed the right of choice by the prepayment rules,and the investor of the early-stage indemnity fund is willing to make an offer to arbitrate with an eligible investor through a professional mediation institution or to reach an arbitration agreement through an arbitration agreement.Fifthly,introduce the authoritative third parties,such as the CSRC to conduct performance evaluations of fund operations and to disclose the results of the evaluation.