Thoughts On Perfecting China's Large-scale Shareholding Disclosure Regulation From The Amendment Of The Securities Law

The "Securities Law" was revised and adopted by the Standing Committee of the 13 th National People's Congress On December 28,2019,which lasted 5 years and was finalized in four reviews.The changes to the large-volume shareholding disclosure system in the new law have also aroused widespread concern in the theoretical community.The revised Securities Law further perfected the large-volume shareholding disclosure system,which consists of the rules for disclosure of rights and interests,the “slow-acting rules” and legal liabilities.The system stipulates that when investors hold the rights of a listed company through the stock exchange to reach the statutory disclosure standard line,they shall publicly disclose their shareholding information,and shall not continue to buy shares of the listed company within the prescribed time limit.Judging from the current situation in China,there are a large number of acts in securities trading activities that continue to increase the number of stocks in disregard of the standard line of large-volume share disclosure obligations,thereby undermining the capital market legal supervision system.The new "Securities Law" improves the large-volume shareholding disclosure system,including improving disclosure requirements,clarifying the type of equity,increasing administrative liability,and increasing civil liability.Although the improvement of these intercoms has eliminated some of the shortcomings of the previous system of large shareholdings,some of the more controversial issues have not yet been resolved.Moreover,some of the amendments made by this new law may not be an improvement for the application of the system in China.To analyze the previous disputes arising from the disclosure of rights and interests,we should first explore the legislative intent and combination of the large-volume shareholding disclosure system With the background of the times,comparing with mature overseas markets,we will re-examine the rationality of the rules on restricting voting rights,slow-acting rules and civil liability.Specifically,the setting of the slow-acting rule has been controversial in the academic world in the past.Many scholars(such as Wu Jian and Wang Xiangchun,etc.)believe that the slow-acting rule is no longer compatible with the current development of China's capital market and should be canceled.In this amendment to the Securities Law,an affidavit was added after the provisions of the slow walk rules,namely: "Except for the circumstances prescribed by the securities regulatory authority of the State Council." Although the provision seems to have a tendency to relax the requirements of "slow walking",it is undeniable that under the general circumstances,the fact that the rules of slow walking should still be observed when accumulating holdings.Secondly,this amendment to the Securities Law clearly stipulates restrictions on voting rights for stocks that violate the increased shareholding disclosure system and sets the limitation period to three years.This means that in the future,large-volume shareholding disclosure obligors who violate the information disclosure obligations and illegally increase their shareholding will no longer be entitled to "release" their voting rights by correcting the disclosure and paying an administrative fine.Whether the threeyear voting right limitation period is reasonable also requires careful consideration from the legal and practical perspectives of the large-volume shareholding disclosure rules.Thirdly,Article 85 of the Securities Law increases civil liability for non-disclosure in violation of disclosure rules.Looking at countries with mature capital markets,there is no civil liability for non-disclosure of information in violation of disclosure rules.Undertaking is by no means a single provision that can be resolved,and consideration should also be given to whether it complies with the constitutional requirements for assuming responsibility in civil law.These rules have room for discussion after the revision of the Securities Law.Combined with the analysis of the existing problems in the existing rules and the framework of the principle of perfect system,as far as the current legislative situation is concerned,the author analyzes the three major problems in the current large-volume shareholding disclosure and attempts to disclose the large-volume shareholding The design of the rules proposes the following aspects: First,it is recommended to improve the voting rights restriction mechanism.The amendments to the Securities Law set a three-year time limit for the voting rights of some stocks held in violation of the disclosure system.This provision makes the balance of the large-volume information disclosure rule obviously fall to the management of the target company and the original controlling shareholder.The value of the large-volume shareholding disclosure system should be grasped to balance the market order and vitality.While affirming the equity disclosure system to protect the market order value,it should also see large-volume shareholdings and hostile acquisitions based on large-volume shareholdings.It is also good for improving the governance of listed companies and protecting the interests of small and medium investors.Therefore,this article demonstrates from the perspective of promoting market vitality and reducing agency costs,and proposes to shorten the time limit for voting rights.Second,it is recommended to cancel the slow-acting rule.China has gradually formed a relatively mature capital market,and the legislative choice to cancel the slow-acting rules is more in line with the current market demand and legal logic;and the cancellation of the US slow-acting rules will not affect the voting rights.Third,it is proposed that the best way for China to regulate large-volume shareholding disclosure violations at this stage is still administrative responsibility.Although this amendment has raised the amount of fines,the widening of the fines will also bring negative effects Too much discretion may lead to rent-seeking,and the disparity in the amount of punishment in different cases is contrary to the fair principle of China's securities law.Therefore,this article proposes that Japan's "Financial Commodity Trading Act" can be used to refer to the violations of the proportion of fines based on the total amount of shares held by the offenders.Fourth,analysis of the application of civil compensation liability,pointing out that applying civil compensation liability to acts that violate the rules of disclosure of rights and interests is not realistic,not only is it difficult to prove the cause and effect relationship,but also stipulates that the liability for compensation must increase the burden on the judicial system It is easy to cause abuse.