Research On Protection Of Small And Medium-sized Investors Of Fraudulent Issuance Companies Under The Compulsory Delisting System

China’s securities market has developed rapidly since its establishment.By the end of 2017,the number of listed companies in the A-share market reached 3,483,and the total market capitalization was 56.62 trillion yuan,which created a new record for China’s securities market.However,there are many problems that can’t be ignored in the rapid development of the securities market.From Green-Land,Wanfu Biotechnology,Hirisun,and Xintai Electric,which was compulsory delisted,successive fraudulent issuance events have brought a huge impact on the securities market,and investors have suffered great losses.Small and medium-sized investors are often in a weak position in the securities market because of the disadvantages of information and funds.The listed companies were suspended from trading,and losses caused by sharp declines in stock prices are all too high for small and medium-sized investors.Therefore,it is particularly important to pay more attention to the protection of small and medium-size investors in compulsory delisting.After experiencing many tough lessons in the securities market,China began to implement the most stringent delisting institution in November 2014.Zero-tolerance compulsory delisting of major illegal and infringing listed companies,such as fraudulent issuance,and the institution requires to strength the protection of delisting companies’ investors.Undoubtedly,it is a major advancement in China’s compulsory delisting system.However,the progress of the protection of small and medium-sized investors after the new institution still needs to be tested in practice.It is necessary to discuss the differences before and after the new institution,and the protection status of small and medium-sized investors.This article selects Wanfu Biotechnology and Xintai Electric cases before and after the new institution for delisting,and first briefly compares the situation,means,disclosure process,and punishment of fraudulent issuance.And then focuses on comparing the actual differences of the protection of small and medium-sized investors,and evaluating the progress and shortage of compulsory delisting system in the protection of small and medium-sized investors.Finally,analyzes the existing problems of the protection of small and medium-sized investors and makes recommendations.The study founds that compulsory delisting is an effective measure to achieve long-term stop loss for small and medium-sized investors.After the new institution for delisting,Xintai Electric is worse than Wanfu Biotechnology in the speed of false statement correction and the quality of information disclosure,but there is a Greater improvement in risk warning;as an important measure for the compensation of small and medium-sized investors,the advance compensation system is also mixed in the scope of compensation and the calculation of loss.The study believes that despite the significant progress made in the compulsory delisting system after the new institution,there are still many problems such as the inefficiency of the share repurchase commitment,the imperfection of the advance compensation system,the unclear sharing of responsibilities and institutional relationship.In the process of compulsory delisting,only the relevant entities of the securit ies market can work together to strengthen the protection of small and medium-sized investors,improve the compulsory delisting system,and promote the stable and healthy development of China’s securities market.