Research On Securities Enforcement Settlement

Facing the frequent occurrence of illegal cases in securities area,the shortage of law enforcement resources,the ineffective protection of investors' interests,the system of securities enforcement settlement is a pilot one in China's securities enforcement area.For the pilot system not functioning effectively,this thesis chooses the perspective of interest balance to analyze the relationship of interests and the causes of deep conflicts in securities enforcement settlement,and proposes the improvement path of securities enforcement settlement in terms of entities and procedures based on the experience of countries and regions with mature experience.The content of this thesis can be divided into four parts:The first part of this thesis is an analysis of the benefits of the securities enforcement settlement.Firstly,by defining the concept and characteristics of securities enforcement settlement,the particularity of the research object of this article is clarified.The securities enforcement settlement is both administrative and contractual,efficient and restrictive.It is clarified that the main interest-related parties of securities enforcement settlement are securities regulators,counterparties and securities investors.The system has the effect of improving enforcement efficiency and market performance,and broadening new channels of civil relief.Finally,the interest relationships among different parties are classified in a typed manner,and the positive agreement and tension between the interest subjects are analyzed in a coordinated manner.The second part of this thesis analyzes the conflict of interest in securities enforcement settlement.By analyzing the specific manifestations of the allocation of the rights and obligations of different parties in the settlement in practice,the problems in the balance of interests are mainly due to the weak power constraints of the securities regulatory agency,which is reflected as excessive administrative priority,lack of effective supervision;insufficient protection of securities investors,reflected in insufficient protection of the right to know,lack of access to participation,and barriers on compensation for losses;insufficient incentives for counterparts to apply for reconciliation,reflected in lack of right of statement,defense and relief.According to the theory of dynamic inconsistency,there is a “dynamic inconsistency” between the two parties in the process of settlement.In the case where the rational expectations cannot be achieved,the securities regulatory agency and the counterparty have incentives to change their strategies based on changes,further intensifing the conflicts between two parties.In addition,the existence of contradictions between the nonpublicity of the settlement and the openness of the securities market,and the inequality of the subject status of the parties to the settlement are also important reasons for the imbalance of interests.The third part of this thesis is the reference and evaluation of the experience of the securities enforcement settlement system in the United States and Taiwan.The United States securities enforcement settlement system guarantees sufficient incentives for counterparties to apply for settlement by applying loose settlement conditions in the entity system and the application of the "without admit nor deny" principle.Complete settlement fund allocation procedures restrict securities regulators and protect the public interest.China's Taiwan region strictly regulates the application of administrative settlement with strict requirements and the effectiveness of the settlement agreement in the entity system.Administrative settlement does not exclude the application of civil settlement in the procedural system.The written consent of the third party and the hearing system guarantee the right of third parties to participate as well.The different arrangements in the United States and Taiwan in terms of entities and procedures are of significance for improving China's current securities enforcement reconciliation system.The fourth part of this thesis is based on the analysis of the foregoing problems and causes,and mature experience of countries and regions,trying to propose an improvement path for the balance of interests in securities enforcement settlement.It puts forward suggestions from the general aspect and the specific suggestions on both entity system and procedural system.It is recommended to adhere to the principle of protecting the interests of securities investors,restricting and supervising the powers of securities regulatory agencies,and taking into account the interests of counterparties.In the entity system,the content of the settlement agreement should be clearly neither recognized nor denied,and the effectiveness of the settlement agreement should be determined by the contract law while ensuring the enforceability of the settlement agreement.In the procedural system,firstly,the settlement information disclosure system shall be established and improved by clarifying mandatory information disclosure obligations of both regulatory agencies and counterparties,specifying the content of information disclosure,and regulating the time and form of information disclosure,including detailed description of the case investigation process,case facts,and especially suspected illegal acts in the settlement results,confirmed evidence,etc.Secondly,the third-party participation supervision mechanism shall be established and improved including the prior written consent system and the public hearing system.The prior written consent system shall adopt the "implicit consent" and "explained withdrawal" principles,starting from the time when the securities regulatory agency accepts the application until the two parties reach a settlement agreement.The participants in the hearing shall be composed of the securities regulatory agency,the settlement counterparty,and the interested parties.Online hearings and electing stakeholder representatives to participate in the hearing is advised.Thirdly,remedies shall be provided to the counterparties,such as granting the right of statement and defense,and the right to file administrative reconsideration and administrative litigation.