Protecting the legitimate rights and interests of small and medium-sized investors is directly related to the vital interests of hundreds of millions of people and the healthy and stable operation of the capital market. At present, under the influence of domestic economic restructuring and external economic situation, financial risks in some specific areas have emerged, and investor protection is becoming more and more important.
"Two strong and two strict" highlights investor protection
"Protecting investors is the primary task of securities regulation." Wu Qing, chairman of the CSRC, said that investors are the foundation of the market when attending the "May 15 National Investor Protection Publicity Day" activity. Protecting the legitimate rights and interests of investors, especially small and medium-sized investors, is a concrete manifestation of the people centered development idea in the capital market field. The regulatory authorities have always put investor protection through the whole process and all aspects of the capital market system construction, supervision and law enforcement, and made every effort to create an open, fair and just market order and legal environment, so that investors can truly feel the fairness and justice of the market.
In the near future, the capital market has fully implemented the new "National Nine Rules" and solidly promoted the implementation of "1+N" policies and measures. The core content is to promote strong supervision, risk prevention, high-quality development, strengthen the foundation, strict supervision and strict management, and accelerate the creation of a safe, standardized, transparent, open, dynamic and resilient capital market. The CSRC has issued a series of rules and regulations, including strictly controlling the entrance of issuance and listing, strengthening the supervision of cash dividends, share reduction, quantitative trading and other aspects, and urging industry institutions to perform their duties, which fully reflects the clear orientation of protecting investors.
Listed companies are the foundation of the market and the source of investment value. Since this year, the focus of capital market supervision has been on "two strong" and "two strict", that is, strengthening the foundation, strict supervision and strict management. More strict institutional arrangements have been established for the "entrance" and "export" of listed companies. The purpose is to resolutely keep counterfeiters out, implement the requirements of openness and transparency throughout the process of company information disclosure, and respect investors The idea of returning investors is integrated into various mechanisms of corporate governance.
Illegal and criminal acts such as fraudulent issuance, financial fraud, insider trading and market manipulation are the cancer of the capital market and seriously infringe upon the legitimate rights and interests of investors. Since last year, the CSRC has resolutely implemented the requirements of "long teeth with thorns" and "sharp edges and corners", "zero tolerance" to combat securities crimes, and the number of cases investigated and handled and the amount of punishment have increased significantly. If the IPO issuance documents of Zeda Yisheng and Amethyst Storage, the listed companies on the science and technology innovation board, have major financial fraud, the CSRC will impose a fine of 142.5 million yuan and 90.71 million yuan respectively on the two companies and the responsible persons, and the public security organ will take criminal coercive measures against more than 10 responsible persons, and the investors will receive more than 1.3 billion yuan of civil compensation.
At the same time, the CSRC will adapt to the needs of the development of new quality productivity, optimize institutional arrangements such as issuance and listing, mergers and acquisitions, and equity incentives, and support those companies with innovative development potential to speed up their optimization and strength. It not only supports the healthy growth of high-quality emerging enterprises, but also supports the transformation and upgrading of high-quality traditional enterprises, so that investors can better share the fruits of high-quality economic development.
Consolidate the foundation of investor protection system
In the A-share market, small and medium-sized investors are not only in a weak position in terms of information, capital, legal awareness, etc., but also in a difficult position to exercise and protect their rights. Wu Qing said that we should firmly grasp the largest market situation where small and medium-sized investors account for the vast majority. In the process of formulating and revising the system, we should pay more attention to the fairness of the system and provide investors with more substantive and fair protection.
Since this year, under the framework of basic laws and regulations such as the new securities law, the CSRC has applied systematic thinking to improve the insurance system covering all aspects of issuance, listing, trading, delisting, etc.
In March, the CSRC issued the Opinions on Strictly Controlling the Access to Issuance and Listing to Improve the Quality of Listed Companies from the Source (for Trial Implementation) to strictly supervise the issuance and listing activities of enterprises, earnestly establish the concept of being responsible for investors, and improve the quality of listed companies from the source. For example, by optimizing the issuance and underwriting system, we will strictly supervise the over pricing and over raising, and improve the sense of gain of small and medium-sized investors.
In the same month, the CSRC issued the Opinions on Strengthening the Supervision of Listed Companies (for Trial Implementation), insisting on putting investors' interests in a more prominent position, responding to investors' concerns in a timely manner, and enhancing investors' sense of gain. For example, we will strengthen the application of litigation by special representatives, comprehensively use investor compensation and relief systems such as advance compensation, support for litigation, and commitment of administrative law enforcement parties, and significantly increase the cost of violations; Emphasize the prevention of detour reduction, effectively reduce the damage to the interests of small and medium-sized investors, and maintain market confidence; Strengthen the supervision of cash dividends, enhance investors' returns, and enhance investors' sense of gain; Promote listed companies to strengthen market value management, improve investment value, do a good job in investor relationship management, and guide investors' expectations in accordance with laws and regulations.
In April, the CSRC issued the Opinions on Strictly Implementing the Delisting System, focusing on improving the overall quality of stock listed companies, proposing to improve the investor compensation and relief mechanism in the delisting process and effectively protect the legitimate rights and interests of investors. In the same month, the CSRC also released the Regulations on the Management of Securities Trading Fees of Publicly Raised Securities Investment Funds, which further optimized the fund securities trading commission system, reduced the transaction costs of fund investors, guided securities fund operating institutions to correct their business philosophy, focused on improving long-term returns of investors, and fully reflected investor protection.
Chen Jie, director of the Commercial Law Research Office of the Law Research Institute of the Chinese Academy of Social Sciences, believes that, based on the new securities law, a series of investor protection laws and regulations provide institutional support for investor protection in the capital market. To truly implement investor protection, we need to further improve the regulatory effectiveness and promote the investor compensation system to play a real role. For example, while increasing delisting efforts, how to protect the vital interests of small and medium-sized shareholders is an important problem that needs to be solved urgently.
Explore the investor protection mechanism with Chinese characteristics
Safeguarding the legitimate rights and interests of investors and ensuring the healthy development of the securities market can not be separated from securities administrative supervision and securities judicial adjudication. In recent years, China has continued to explore and deepen some new paths for investors to exercise and protect their rights with Chinese characteristics, such as advance compensation, representative litigation, and industrial professional mediation.
"We will build a three-dimensional accountability system that integrates administrative law enforcement, civil accountability, and criminal strikes." Liu Guixiang, a full-time vice ministerial member of the Judicial Committee of the Supreme People's Court, said that the Supreme People's Court will strengthen coordination with regulatory authorities, strengthen the connection and coordination of administrative law enforcement, civil accountability, and criminal strikes, and work together to punish violations and crimes in the capital market and purify the capital market.
Advance compensation is a characteristic mechanism for China's capital market to strengthen the protection of investors' rights and interests. For small and medium-sized investors who are difficult to obtain compensation, the system stipulates that investors' losses caused by fraudulent issuance, false statements or other major illegal acts should be supported to take the initiative to compensate investors' losses first, and then recover from other responsible subjects. The first Amethyst storage advance compensation case after the new securities law, less than three months ago, nearly 17000 investors were compensated 1.086 billion yuan, covering 97.22% of the total number of qualified investors.
The new securities law has established the securities collective action system, which has made up for the weakness of securities civil compensation and relief. In particular, the "special representative litigation", where the representative is an investor protection agency, has adopted the mode of "implicit participation and explicit withdrawal" of investors, which reflects the regulatory authorities' efforts to increase civil compensation and relief for securities and futures The determination to more effectively protect the legitimate rights and interests of investors. In November 2021, the special representative of Kangmei Pharmaceutical decided in the first instance of the lawsuit, 52037 investors received a total compensation of about 2.459 billion yuan, and the relevant responsible persons bear huge joint and several liabilities. Kangmei Pharmaceutical Case, as the first Chinese class action case characterized by "implicit participation and explicit withdrawal" of investors in China, is a milestone. Liu Guixiang said that the Supreme Law and the CSRC will jointly promote the normalization of representative litigation system.
Professor Gu Gongyun, Vice President of East China University of Political Science and Law, believes that the development of China's securities market has its own characteristics, such as the large number of retail investors and wide geographical distribution. When rights are infringed, it is difficult and costly to safeguard rights. He expects that the securities class action system will play a better deterrent role in continuous practice and improvement.
