A Study On Innovation On The Rasing And Sharing Mechanism Of Securities Investor Protection Fund

Over the years,the Chinese capital market has become more mature.One of the prominent characteristics is that the majority of investors are small and medium-sized entrepreneurs.This is the securities retail market.This trend is in line with the development of the Chinese capital market.However,the lack of knowledge and understanding of securities market put them in a disadvantage position.Their information acquisition,analysis,judgment,legal and risk awareness as well as risk-aversion appetite are not sufficient.Their consciousness of self-protection is weak.Thus,the respective government departments should attach attention to the protection of their legitimate rights and interests.Since the regulatory requirements,market conditions and investment environment are not mature,it is necessary to protect the investors.Investor protection is a complex and diffcult task.Therefore,solely relies on the government is not enough.The market participants also need to contribute.In recent years,China has developed the system to regulate securities industury,such as the establishment of the policies,measures and guidelines.In 2005,the government introduced the Securities Investor Protection Fund System(hereinafter referred to as the Protection Fund).This plays an important part in investor protection and compensation.Particularly,it has achieved the overhaul of securities companies risk management process.And it has stabilized the securities market and timely defused some crisis.However,due to the lack of the understanding of the operations of Protection Fund System,there is still room for improvement in the fund raising of Protection Fund Company and the sharing mechanism of the securities companies.This paper is based on the analysis of a large number of documents and various structure of the securities industury,including the information from the major international financial centers in the world.I also analyzed the design and operation mechanism of the Chinese protection fund.I concluded that there are still rooms for improvements.Finally,in order to ensure the stable sources of incomes to the Protection Fund,it is necessary to broaden the levy channels.The rates the securities companies have to pay are according to their risk assessment result.Eventually,this should achieve the maximum effectiveness of the Protection Fund.