The Enforcement of Securities Law in China : A Law and Economics Assessment

This book takes a law and economic approach to examine the securities law enforcement in China and provides an in-depth empirical analysis on the enforcement inputs and outputs. In contrast to previous studies, it systematically collects a large sample of judicated securities fraud cases and public sanctions as disclosed by the listed companies. The enforcement regime is further divided into the private enforcement exemplified by the civil litigation imitated by harmed investors and public enforcement by sanctions proceedings initiated by public agencies. Academic researchers, policy makers and practitioners, who are interested in the securities market and regulation could find the information provided in this book interesting. Contents About the Author 1 Introduction References 2 Law, Enforcement and Securities Market Development 2.1 Legal Determinants of Securities Market Development 2.2 The Rise of “Enforcement Matters Hypothesis” 2.2.1 Theoretical Discussions Concerning Securities Law Enforcement 2.2.2 Case Study: American Private Enforcement Regime 2.2.3 Case Study: American Public Enforcement Regime 2.3 The Law and Finance of Securities Law Enforcement in China 2.3.1 Public Enforcement of Securities Law in China 2.3.2 Private Enforcement of Securities Law in China 2.3.3 Preliminary Reflections on the Securities Law Enforcement in China References 3 China’s Securities Market and Anti-Securities-Fraud “Law on the Book” 3.1 The Establishment of National Stock Exchanges and the Quota Regulation 3.2 Securities Law of 1998 and the Merit Regulation 3.3 Securities Law of 2005 and the Split Share Reform 3.4 The Registration Reform and Securities Law of 2019 3.5 Securities Law of 2019 and Anti-Securities-Fraud Rules 3.5.1 Disclosure Obligation and the Liability for Misrepresentations 3.5.2 The Prohibition of Insider Trading and the Liability of Inside Traders 3.5.3 The Prohibition of Market Manipulation and the Liability of Manipulators References 4 Public Enforcement Initiated by the CSRC and Its Regional Offices 4.1 CSRC and Its Enforcement Proceedings 4.2 Enforcement Inputs of the CSRC 4.3 Enforcement Outputs of the CSRC 4.3.1 Enforcement Outputs at Commission Level 4.3.2 Enforcement Outputs at the Regional Office Level 4.4 Is CSRC’s Enforcement Action Biased? 4.4.1 Hypotheses and Sample 4.4.2 Empirical Findings 4.5 Is CSRC’s Enforcement Action “Toothless”? 4.5.1 Hypothesis Development 4.5.2 Sample Description 4.5.3 Stock Market Reactions to Enforcement Actions References 5 Complementary Public Enforcement Proceedings 5.1 Alternative Enforcement Proceedings Administered by the CSRC 5.1.1 Prioritized Compensation Scheme 5.1.2 Administrative Settlement Regime 5.2 Enforcement Efforts of the Stock Exchanges 5.3 Enforcement Efforts of the Securities Association of China 5.4 Enforcement Efforts of the Ministry of Finance 5.5 Criminal Enforcement Proceedings 5.6 Is Public Enforcement of the CSRC and Stock Exchanges Responsive? 5.6.1 The Categorical Analysis of the Enforcement Outputs 5.6.2 The Tested Hypotheses 5.6.3 Empirical Findings References 6 SPC’s 2003 Provisions and the Collective Action Problem of Securities Litigation 6.1 Institutional Background 6.2 The Enforcement Outputs of Securities Litigation 6.3 The Calculation of the Tortious Compensation 6.4 Collective Action Hypothesis, Sample and Identification 6.5 Empirical Findings References 7 Securities Law of 2019 and the Enhanced Private Enforcement Regime 7.1 Securities Law of 2019 and Multidimensional Securities Litigation System 7.2 Regular Representative Litigation: Wuyang Case 7.2.1 The Corporate Bond Sector and Wu Yang Misrepresentation Case 7.2.2 The Debatable Elements About the Compensation Awarded 7.3 Special Representative Litigation 7.3.1 China Securities Investor Services Centre 7.3.2 The Specialized Financial Court 7.3.3 Kangmei Case 7.4 Stock Market Reactions to the Private Enforcement Reform 7.4.1 The Hypothesis, Identification Strategy and Sample 7.4.2 Market Responses to SPC’s 2020 Provisions 7.4.3 Market Responses to Wuyang Case and Kangmei Case 7.5 Alternative Dispute Resolution for Securities Fraudulent Misconducts References 8 Conclusion "This book takes a law and economic approach to examine the securities law enforcement in China and provides an in-depth empirical analysis on the enforcement inputs and outputs. In contrast to previous studies, it systematically collects a large sample of adjudicated securities fraud cases and public sanctions as disclosed by the listed companies. The enforcement regime is further divided into the private enforcement exemplified by the civil litigation imitated by harmed investors and public enforcement by sanctions proceedings initiated by public agencies"--Publisher's description