| In March 2018,after the issue of the notice on several opinions on the pilot program of issuing stocks or depository receipts in China by innovative enterprises(hereinafter referred to as the "notice pilot "),the CSRC have issued several regulations,specify the information disclosure of depository receipts,due diligence,public supervision and depository agreement related issues in detail;The Shanghai stock exchange and the Shenzhen stock exchange have also issued corresponding implementation rules and business guidelines for the actual operation of the CDR.In fact,since 2001,China Depository Receipt(hereinafter referred to as "CDR")has been widely mentioned by experts,scholars and media.The feasibility and implementation path of China Depository Receipt have aroused heated discussion in the academic and practical circles.However,due to the instability of China's securities market,the multi-level capital market has not yet formed,resulting in the implementation of CDR was put on hold.After more than ten years of development,China's securities laws and regulations tend to be improved,and finally CDR will be officially launched into the market in a pilot way in 2018.However,due to the long-term situation of "emphasizing financing over investment" in the relevant system of China's securities market,and the fact that investors tend to be more "speculative",the pattern of "strong financiers and weak investors" is caused.This pattern will be further amplified due to the particularity of CDR itself.As CDR is different fromgeneral securities,its issuance and transaction involve transnational subjects,conversion of underlying securities and depository receipts,inconsistent information disclosure rules in different countries,complexity of the process and diversification of subjects will lead to more vulnerable holders.Therefore,the design of the CDR implementation path needs to be based on comprehensive and effective protection of the holder.Therefore,the purpose of this paper is to through the demonstration of the necessity of depository receipts holders rights protection,based on the analysis of the basic rights of holders,introduces and analyzes the protection system and relief system of the depository receipt holder's right to know,receive dividends and voting rights,and considering the present situation of China's securities market development and the basic premise,to put forward suggestions for improvement of the protection mechanism and relief mechanism of the depository receipt holder's fundamental rights in our country.First of all,it gives an overall overview of the protection of depository receipt holders,introducing the concept,operation mechanism and types of depository receipt,the basic rights that depository receipt holders should enjoy,and the necessity of protecting holders due to diversified trading subjects and complicated trading structure of depository receipt holders.After the overview,due to the advantages of the American depository receipts(hereinafter referred to as "ADR")system,the discussion of the protection system of the basic rights of ADR holders in the United States can give rise to some thoughts on the improvement of China's protection mechanism construction.The protection of ADR holder's basic rights in the United States is mainly discussed from two aspects,the protection system of holder's basic rights and the relief system of basic rights.The protection system of basic rights mainly includes the protection system of the right to know,the right to share and the right to vote,and the relief system of basic rights also includes relief system of the right to know and the right to share and the right to vote.In order to ensure the realization of the holder's right to know,the United States protects the holder from two aspects in the protection system,one is from the level ofinformation disclosure system,and the other is from the level of supervision.In terms of information disclosure system,the United States has designed four types of issuance modes according to the needs of different foreign issuers,corresponding to the information disclosure systems with different degrees of strictness.The more the information disclosure rules of the issuance modes that have a greater impact on the interests of the holders,the stricter the rules will be.The information disclosure system is a model for the United States to balance attracting foreign capital and protecting holders.The voluntary principle has attracted foreign issuers at different levels,imposed different information disclosure obligations,and provided American investors with more investment options.At the regulatory level,the United States has adopted a regulatory framework combining leniency and strictness to protect the rights of holders of ADR while maximizing the attraction of foreign issuers.On the one hand,higher disclosure standards are adopted to allow foreign issuers to voluntarily "bind" themselves to a strict legal system,so that holders can obtain comprehensive,timely and accurate information disclosure.On the other hand,the corporate governance rules allow foreign issuers to be exempted,reducing the compliance burden of foreign issuers.But only if the exemption does not prevent the holder from making the right investment decision.In addition,American institutions play their respective roles in the regulation of issuers and jointly build an investment environment based on comprehensive and effective information disclosure for American investors.There are two main features of the right to know protection system in the United States.One is the fine division of labor of information disclosure system.The move frees foreign issuers from onerous disclosure obligations without placing an undue burden on depository Banks and gives holders more access to information.The other is a comprehensive regulatory measure that combines leniency with strictness.Strict regulation to protect the holder's right to know,and can attract foreign issuers to the greatest extent.However,the regulatory and information disclosure system of CDR in China is similar to the third-level ADR in the United States,with strict issuance conditions and disclosure standards.However,the design of relevant systems revealsthat China strives to achieve a balance between attracting foreign issuers and protecting Chinese holders.For example,on the one hand,the information disclosed by an issuer in a foreign country should be simultaneously disclosed in China;on the other hand,some information disclosure is simplified to reduce the compliance cost of the issuer.However,the conflict between the regulations may lead to the suspension of some rules to simplify the disclosure.The issuer cannot enjoy the reduction of the burden,and the holder is immersed in too complex information disclosure.Therefore,the author believes that only the "differential information disclosure principle" can truly liberate the issuer from the different and strict disclosure standards of the two countries and enable the holder to obtain effective and comprehensive information disclosure.On the other hand,China has not added depository to the list of information disclosure obligors,which will be a great obstacle to the protection of the right to know.The protection of ADR holders' right to share and vote in the United States is firstly reflected in clarifying the status of depository Banks in the right to share and vote.As the intermediary and bridge for holders to exercise their rights,depository Banks play an irreplaceable role and assume fiduciary duty as trustees.Secondly,the protection of the right to dividends is to supervise the completion of obligation of the depository bank to distribute dividends and publicize them,and to ensure the independence of the dividends and the inherent property of the depository bank,so as to prevent the failure of the depository bank to realize the right to dividends in the bankruptcy of depository.The protection of the right to vote is to legalize the obligations of the depository to the holder and exercise strict supervision to ensure that the depository bank provides convenience for the holder to exercise the right to vote.The focus of the United States on the mechanism of holder's right to share and right to vote lies in whether the intermediary role of supervising depository Banks is fully played.Whether it is the right to share or the right to vote,its protection can be divided into three levels.First,it is clear that in the whole legal relationship,the depository bank is in the position of the trustee,and has fiduciary duty to the holder;Secondly,the mechanism of voting right and distribution right of holders is designed in detail to improve the possibility of exercising the right of holders.Finally,the continuous supervision of depository Banks' performance of fiduciary duty is essential.As to exercise of the holder to receive dividends and voting rights in our country,the CSRC only specifies the issuer and depository shall adopt the secure,economic and convenient network or other ways to facilitate the holder to attend the shareholders meeting,at the same time to ensure that domestic and overseas investors for its own rights and interests of the same kind of shares shall have equal rights,but lack of a more detailed provisions.Therefore,the author believes that in order to better protect the right to share and the right to vote of the holder,China should first clarify the position of the depository in the protection of the right to share and the right to vote,better apply the trust theory to the depository receipts,and impose fiduciary duty on the depository to prevent the infringement of the holder's legitimate rights;Secondly,the liability of the depository for the improper behavior of the custodian should be strengthened,mandatory provisions in escrow and depository agreements are essential.Finally,the depository is required to disclose the relevant situation of the exercise of the right to share and the right to vote so that the holder can know in time whether the right is damaged.Next comes America's system of remedies for basic rights.When the holder's right to know is damaged,the United States has set up perfect relief rules for it.The first is to ensure the realization of litigation right.Expanding the jurisdiction of American's courts has always been a strength of the America.From "standards of conduct" and "standards of results" to "trading principles",the United States has always practiced the principle of protecting domestic investors through its own jurisdiction and trial,even ADR is no exception.In addition to the expansion of jurisdiction,from the perspective of litigation mode,class action also makes its own contribution to the protection of the holder mechanism.Class action has its inherent advantage in system and can realize large-scale litigation economy.More importantly,it will be able to hold the weak strength of the shareholders together to fight against the issuer.Finally,the establishment of a "fair fund" to compensate theholder for the loss of fraud is the most direct mechanism to protect the holder.When receive dividends and voting rights is damaged,the related provisions of the United States to receive dividends and voting rights relief is less,mainly is giving the holder the right to sue,and protect in the lawsuit,permit holders prove his claim from various angles,such as from the violation of depository agreement,faith obligation violation,the damage of the principle of good faith and fair trade set.But proving these violations is not easy in practice.Given the irreplaceable importance of the right to know to the holder,the American relief system for the right to know is very perfect.From expanding the jurisdiction of the court in the United States before litigation,so that to convenient holder to Sue,to through the group lawsuit system to close the gap between holder with the issuer,achieving slope protection of the holder in the lawsuit,finally to ensure holders to get full compensation by equity fund system after suit,its perfect relief system again also correspond to strict information disclosure system.In contrast,the relief of the right to share and the right to vote is not so comprehensive.In addition to the right of action,although there is some protection in the proceedings,but in fact imposed excessive burden of proof to the holder.While as to the remedy system of holder's fundamental right in our country,first in jurisdictional respect,CSRC stipulates a mandatory requirement in depository agreement,must contain clause as "all dispute that arise from depository receipt is in charge of the jurisdiction of Chinese court",with this implementation to achieve the biggest remedy to holder.However,due to the strict territorial principle established in the securities law of China,whether this provision can not be effectively implemented due to the violation of the provisions of the superior law remains to be discussed.Therefore,in order to achieve the legislative purpose of protecting holders,it is necessary to make it clear at the legal level,establish the extraterritorial effect of the securities law,introduce the "standard of conduct" and "standard of result" of American courts,and carry out some localization transformation.Since the trial operation of CDR has just started in China,the corresponding holder protection system has not yet been established,but it can be applied to generalsecurities investor protection mechanism,such as the establishment of the third-party institutional protection of China securities small and medium-sized investor service center limited liability company and the establishment of securities investor protection fund.To a certain extent,these systems protect the interests of investors,but they play a limited role.For the holder,the biggest relief when the right is damaged is to obtain the full amount of compensation,so the author thinks that the American securities class action and the establishment of "fair fund" can be used for reference by our country. |
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