Study On Legal Issues Of ISC's Exercise Of Rights By Holding Shares

In China,minority investors are the largest number of fund suppliers in the capital market.Whether they could be protected appropriately influences their confidence to invest directly,and further influences the prosperity and stability of the whole capital market.China Securities Investor Services Center(“ISC”)is an investor protection agency specially created by the public power.ISC holds 100 shares of all listed companies in Shanghai and Shenzhen stock market,thereby helping minority investors protect rights by exercising shareholder's rights based on the identity of shareholders,which is the same as normal minority investors.However,what is different with minority investors is that ISC is not on a native position on rights protection,ISC protects rights by exercising shareholder's rights positively.The activities it has carried out have been widely praised by the public.However,the practice of ISC still has problems and has not fully played its intended role.From the perspective of the protection system,the unclear legal position has caused it to be criticized,the limitation of investor protection scope also runs counter to its original intention;From the perspective of the specific system,lately revised Securities Law gives breakthrough to ISC from Derivative Litigation System,Representative Litigation System and Securities Dispute Mediation.At present,relevant system is still at the level of principled regulations and lacks specific implementation rules,which may cause ISC shareholding exercise system to fail to be implemented.In order to perform functions actively,ISC needs to obtain more detailed and broader rights protection.However,the unknown legal position has become a bottleneck that prevents it from obtaining the special rights.Therefore,this article analyzes and compares the nature of investor protection center of Taiwan province and ISC,and clearly distinguishes the legal position of ISC.Finally,on this basis,this article puts forward detailed suggestions for the improvement of the shareholding exercise system of ISC from the perspective of legislation.This article consists of four chapters:Firstly,this article introduces the basic role and shareholding characteristics of ISC as an ordinary minority shareholder.The holding of the 100 shares by ISC becomes the basis for right exercising.At the same time,ISC is also an investor protection institution that actively exercises its rights.Under this status,ISC shall play a diverse role and maintain the expected role of the minority investors actively.At present,ISC has repeatedly performed its duties through litigation and mediation,and has actively assisted minority investors to protect their rights.The activities in recent years have been widely praised by the public from all walks of life.However,there are still many problems with current exercise of ISC.Overall,current legal position of ISC is still unknown and the investor protection scope is limited.From the perspective of the implementation of specific systems,the latest revised Securities Law has made new provisions on the application of Derivative Litigation System,Representative Litigation System and Mediation System for ISC.However,it still lacks operability in application.As a result,it is difficult to implement the relevant specific systems.It could be seen that in order for ISC to fully perform its duties,it is necessary to follow up the corresponding supporting rules to improve the existing principles.However,the current legal position of ISC is unclear,which makes it difficult to determine its special rights allocation trend.Therefore,clarifying the nature of ISC and giving ISC a clear legal position has become the core issue to solve the current obstacles.ISC is quite similar to the investor protection center in Taiwan province,but there is still a big gap between them in terms of system design.Taiwan province's advanced experience could provide comparison and reference for clarifying the legal nature of ISC.From the perspective of institutional characteristics and exercise rights,ISC has obvious public welfare and non-profit nature.At the same time,ISC has a clear official background,and the shares exercise has played a role in filling the regulatory loopholes to a certain extent.However,unlike the regulatory agency,ISC is a limited liability company,any action of ISC is directly dependent on its identity of shareholder.To sum up,ISC is essentially a special institution between the government department and the market organization,and an organization that achieves the purpose of public law by means of private law.Finally,the nature and legal position of ISC must be clarified in law,so as to provide the legal basis to obtain more preferences.As the relevant laws and regulations regarding the investment exercise rights of the ISC are still principle provisions,more detailed provisions should be provided for on the exercise rights of ISC,such as the Derivative Litigation System and Representative Litigation System to ensure the legality,legitimacy and operability of the actions of ISC,so that ISC could play its due role as an investor protection institution,to protect the legitimate rights and interests of minority investors,and maintain the capital market in a good order.