On The Perfection Of The System Of Advance Compensation In The Securities Market

In recent years,with the continuous development and expansion of China’s securities market,the incidence of illegal acts such as false statement in the process of securities trading is also increasing,and the infringement disputes caused by illegal acts of securities are also increasing.However,there has never been a complete system to protect the legitimate rights and interests of investors for some kinds of infringement.Therefore,in practice,in order to resolve disputes more quickly,compensation in advance,as a mechanism to protect the legitimate rights and interests of investors,has been introduced into the securities market.However,the institutional development of China’s securities law has not become a culture for a long time.It was not until the revision of the new Securities Law in 2019 that the first compensation system was brought into the track of legalization.The introduction of this system,first of all,is in line with the law of the development of the securities market,and at the same time,for investors,they also better meet the needs of their rights protection.Secondly,from the practical level,as a dispute settlement mechanism other than litigation,payment in advance promotes the establishment of a complete investor protection system.Meanwhile,it also objectively standardizes securities behavior and urges relevant liable subjects in the securities market to be more prudent in performing their duties.In order to protect the rights and interests of investors can be more comprehensive,timely and effective,and maintain the smooth operation of the entire securities market.Therefore,in order to give full play to the advantages of this mechanism in the settlement of securities disputes,it is essential to further improve and refine the relevant system norms.However,due to the application of this dispute settlement method in practice earlier than the establishment of the system and theoretical development,so the new "Securities Law" Article 93 still has some defects,the specific details are not perfect,for practice,the existing system is still unable to provide a complete theory.At the same time,this system has only been implemented for more than one year,and the academic research on this issue is still in its infancy.To this,the article summarized the domestic many years experience in the practice of leading compensation system,and combined with the related systems outside of enlightenment,mainly adopts sum up,comparative study,empirical study,the methods of literature research,aiming at the problems have been found with prominent problem,put forward suitable for China’s actual situation,has a practical significance to further perfect the relevant opinions,First of all,from the perspective of the current provisions of the new Securities Law,the scope of the subject that can be applied to the system of advance compensation in China is still relatively single.However,the single scope of the subject is likely to bring about greater restrictions on the subsequent compensation funds,and may increase the difficulty in the division of the ultimate liability and the realization of the recourse right of the claimant in advance,and may even lead to the exemption of the real ultimate liable person from legal punishment.This article in analyzes the legislative intent of the scope of subject of the present,the corresponding solutions for legislators’ concerns,the issuer and its directors,supervisors and senior management personnel may advance compensation subject range,broadening the scope of subject,in order to ensure the promotion of leading compensation system and healthy development,promote the harmony and stability of the stock market.Secondly,the current compensation system of our country is not specific enough on the compensation fund,the source is too single.The existence of this problem leads to the instability of the source of funds that can be compensated to an investor when the prepaid payee has the problem of insufficient funds.In order to solve this problem,the article briefly analyzes the with leading compensation system of our country has a certain similarity of the system of equity funds in the United States,and combined with the reality of our country,the Suggestions of the system of experience to draw lessons from,will be confiscated gold into the sources of compensation funds,set up special funds to a third party independent operation,in order to improve the stability of the compensation system of the compensation money first.Thirdly,the new "securities law" in the legal provisions did not have the recourse exercise path of the first indemnity payer to try to provide.This kind of predicament may eventually lead to the occurrence of securities disputes,and the initiative of the responsible subject to choose to settle the disputes through the first compensation system is constantly reduced.In order to reduce this risk,this paper suggests that we should start from the two aspects of guaranteeing the recovery fund and clarifying the way of the final liability division,maintain the enthusiasm of the responsible subject to choose the application of this system,and promote the further promotion of the first compensation system.Finally,there is still no clear stipulation on how to prevent and control the risk of the advance payer in the compensation process in China’s advance compensation system.The existence of this risk may lead to the first payee to face financial difficulties or even bankruptcy and other operational difficulties after the claim payment is completed.For the sake of risks,this paper suggests that the third party commercial insurance system should be established to divide risks.At the same time,based on the actual situation of our country,it also gives reasonable suggestions on the specific design path of this new type of insurance.As a new dispute settlement system,only by constantly promoting the improvement of the first compensation system itself,and by establishing and perfecting the supporting mechanism to promote its own continuous improvement and promotion of application,can it give more play to its protection of investors’ rights and interests and maintain the harmonious and stable development of the securities market in the shortest time.