How do stocks protect shareholders' rights and interests

on the protection of the interests of small investors in China's securities market (paper)

investors are the main components of the securities market and the basis for its existence and function. Therefore, protecting investors' interests and stabilizing investors' confidence in the market are of great significance to maintaining the stability and development of the securities market. In China's securities market, small and medium investors account for the vast majority of investors and are the main source of circulating funds in the market. Therefore, the protection of investors' interests in China should be more biased towards small and medium investors. However, the interests of small and medium-sized investors are infringed from time to time. The external reasons include defects in the legal system, inadequate supervision by the regulatory authorities, dishonest operation of intermediaries, listed companies and major shareholders, etc.

In addition, investors themselves also have some shortcomings, such as insufficient legal concepts, weak risk awareness, lack of professional knowledge and conformity psychology. To protect the rights and interests of small and medium-sized investors, we need to start from both the external environment and the investors themselves. On the one hand, further improve the legal system, establish a clear and specific civil liability compensation system, so that investors can be compensated for their losses; Establish a special institution to protect investors' rights and interests and further improve the investor protection fund; Strengthen market supervision and punishment; On the other hand, investors should actively improve their own legal and risk education, strengthen the study of professional knowledge, enhance investment skills, and make rational investment. Only a two-pronged approach can effectively protect the interests of small and medium-sized investors.

I. Analysis of the Importance of Protecting the Interests of Investors

I. Importance of Protecting the Interests of Small and Medium-sized Investors

Investors are the most important part of the securities market and the most important source of liquidity. Without investors, the securities market cannot play its basic function of raising funds, let alone other functions such as resource allocation. Therefore, protecting investors' interests and maintaining investors' confidence in the market are of great significance to the existence and development of the securities market.

China's securities market started late, and it has only been established for more than ten years. Compared with foreign mature securities markets, China's securities market has its own particularity, that is, the number of small and medium-sized investors in China's securities market is absolutely dominant. Relevant data show that by the end of December 21, the total number of accounts in Shanghai and Shenzhen stock exchanges in China has reached 9,554,8, including 359,6 institutions and 9,215,2 individuals. The market share of individual investors in trading and holding shares both exceeds 8%. It can be seen that although small and medium-sized investors account for a small proportion in the total number of shares (relative to large shareholders such as state-owned shares and legal person shares), they are the main body of the securities circulation market and the main group of liquidity supply in the market. Therefore, the protection of investors in China should be more biased towards protecting small and medium-sized investors.

It is of great significance to protect the interests of small and medium-sized investors:

1. Protecting the interests of small and medium-sized investors and maintaining investor confidence are the basis for the development of joint-stock companies. The purpose of issuing shares is to raise funds. Most of the major shareholders are the promoters of the company, and the amount of shares held by the company as the stock of assets before listing is limited. Then, in order to raise more funds to expand and develop the enterprise, it is more important to rely on many small and medium-sized investors outside the enterprise. Therefore, only by providing effective protection for small and medium-sized investors can investors be encouraged to enter the capital market, provide a steady stream of funds for the company and promote the further development of the enterprise.

2. Only by protecting the interests of small and medium-sized investors and maintaining investors' confidence can the stability and development of China's securities market be maintained, and the securities market can function normally and promote social and economic development. The securities market has the functions of raising funds, investing, optimizing resource allocation and capital pricing in a country's economy, while a large number of existing state-owned shares and legal person shares in China are restricted in circulation, so these functions of the securities market are concentrated in social public shares. Therefore, the behavior choice of small and medium investors directly affects the function of the securities market. Only by providing effective protection for small and medium-sized investors can we give full play to the functions of the securities market, maintain the stability and development of the market, and further promote social reproduction and the development of the national economy.

(II) Analysis of the current situation of the interests of small and medium-sized investors It is of great significance to protect the interests of small and medium-sized investors. However, in reality, cases in which the interests of small and medium-sized investors are infringed often occur, mainly including the following categories:

The first category: related transactions between major shareholders and listed companies;

category ii: false packaging and fictitious profits;

the third category: stock price manipulation;

category iv: major omission or concealment;

category 5: insider trading.

Acts and phenomena that infringe on investors' rights and interests: 1. Disclosure of false information; 2. Fictitious profit; 3. Stock price manipulation. There are still many phenomena that infringe on the interests of small and medium-sized investors, which are all caused by the special situation of our market.

II. Analysis of the external causes of the infringement of the interests of small and medium-sized investors in China's securities market and protective measures

Infringement of the interests of investors by intermediaries

Securities intermediaries include securities companies engaged in securities business and various institutions engaged in securities service business, and are intermediaries between investors and fundraisers in the securities market. Whether intermediary institutions can operate in a new standard is closely related to the stability of market order and the protection of investors' interests. In recent years, there have been many incidents that infringe on the interests of small and medium-sized investors in China's securities market, which are closely related to the illegal behavior of intermediary institutions.

There are several aspects of illegal behaviors of intermediaries:

1. Falsely "packaging" or making financial fraud for enterprises to defraud the listing qualification. In order to ensure and expand the market share, some intermediaries, driven by interests, cooperate with listed companies to falsify.

2. Conduct related party transactions in listed companies to seek benefits.

3. Spreading false information to mislead investors has achieved the goal of benefiting some institutions and individuals.

4. Securities companies use their own advantages to manipulate stocks. With abundant funds, well-informed information and operational advantages, securities companies have the ability to manipulate the market and make profits for themselves.

5. Securities companies and their employees misappropriate clients' funds.

5. listed companies and major shareholders infringe on the interests of small and medium-sized investors

listed companies and major shareholders mainly infringe on small and medium-sized investors: 1. fraudulently obtaining listing qualifications. 2. Illegally occupying the funds of listed companies. 3 Transfer assets or profits and operate profits through related party transactions. 4. The distribution of listed companies is not standardized, and dividends are low. 5. Providing false information, manipulating stock prices and misleading small and medium investors. 6. Embezzlement and misappropriation of funds of minority shareholders.

(II) Measures to protect the interests of small and medium-sized investors

The protection of the interests of small and medium-sized investors is of great significance to the stability and development of the securities market, and all countries put this work in an important position. The establishment of China's securities market is still very short, and the experience of market supervision and investor protection is still relatively small, so investors' interests are more damaged than those in mature markets. There is still a lot of work to be done to improve the market supervision system.

The practical experience of protecting investors' rights and interests in China's securities market

Specifically, it includes the following aspects: 1. 2. Set up investor protection fund. 3. The procedures for small and medium-sized investors to file civil lawsuits are clearly defined.

3. China's corresponding measures and suggestions (1) Improve the legal system

A comprehensive and effective legal system is the basis and guarantee for maintaining market order and market development. To improve the legal system, first of all, in the existing legislation, specific provisions should be made for illegal acts such as market manipulation, insider trading and customer fraud. The scope of application, behavior definition, responsibility and other detailed contents of these violations should be formulated accordingly, so that there are laws to follow. For common illegal acts such as false statements, penalties should be increased to curb the recurrence of violations.

second, improve the civil compensation system. While cracking down on and punishing the illegal subjects, it is also extremely important to compensate the infringed investors. Because the economic strength of small and medium-sized investors is weak, if they are not compensated after their interests are damaged, they will lose their confidence in the securities market again and re-enter the market, which will affect the development of the market. Therefore, timely compensation and assistance is an important means to protect the interests of investors, encourage investors to enrich their confidence and maintain the stable operation of the market.

Third, learn from foreign experience and formulate a special Law on the Protection of the Rights and Interests of Small and Medium-sized Investors or investor protection regulations to effectively protect the rights and interests of small and medium-sized investors from infringement. At present, China's investor protection law has been put on the agenda, which is undoubtedly another powerful guarantee for small and medium investors in the securities market.

(2) Strengthening the supervision of the securities market

Strengthening the supervision of the securities market is the most direct and effective way to curb all kinds of illegal behaviors in the market. To strengthen the supervision of the securities market, first of all, the supervision department should clarify its own responsibilities and act in strict accordance with the law. Whether the regulatory authorities regulate or not has a great influence on the market. Only when the regulators first abide by the rules and regulations can they supervise the market well, otherwise, the lawless elements will be emboldened.

second, strengthen the professional training of securities regulators. The securities market is a market with a high level of specialization. Without certain professional knowledge and understanding of the market, it is impossible to set foot in all aspects of the market, and it is impossible to fully supervise the market, so that illegal elements can take advantage of it.

third, strengthen market supervision, and do a good job in supervising intermediary institutions such as securities companies. Intermediaries such as securities companies are themselves the front-line supervisors of the securities market. If they violate relevant laws and regulations, they cover up, protect and even support the illegal behavior of listed companies, which is even more detrimental to the supervision work of the regulatory authorities. Therefore, it is of great significance to strengthen the supervision of intermediary institutions. To strengthen the supervision of intermediaries, it is necessary to maintain the independence of intermediaries; Implement an effective firewall system among all departments of securities companies; Third-party independent depository of securities companies' deposits is implemented to ensure that customers' deposits will not be occupied; Establish a professional credit evaluation system, and the third party will evaluate and supervise the credit of intermediary institutions and their employees.

fourth, strengthen the supervision of information disclosure of listed companies, ensure the authenticity, accuracy, completeness and timeliness of information, and try to enable small and medium investors to obtain equivalent information.

Fifth, make full use of the media's supervision by public opinion. The media supervision by public opinion is relatively timely, comprehensive and flexible, which is conducive to the government supervision department to grasp the trend of the securities market and take timely actions.

(3) Perfecting the split share structure and the governance structure of listed companies

Perfecting the split share structure of joint-stock companies is the fundamental way to reduce the infringement of the interests of minority shareholders by major shareholders. First of all, we should speed up the reduction of the proportion of state-owned shares and legal person shares, reduce the concentration of equity, and decentralize equity, so that listed companies can become "public companies" in the true sense. Secondly, it is necessary to reform the voting system, further promote and improve the online voting system of the shareholders' meeting of listed companies, so that small and medium shareholders can participate in the shareholders' meeting conveniently and quickly and fully realize their voting rights. Thirdly, it is necessary to straighten out the relationship among the shareholders' meeting, the board of supervisors and the board of directors, improve the system of independent directors, so that all departments within the company can supervise each other and ensure that the rights and interests of shareholders, especially minority shareholders, are not infringed.

to improve the corporate governance structure, it is necessary to formulate effective incentive and restraint mechanisms. On the one hand, the management personnel's management ability and labor pay are compensated reasonably, and the enthusiasm of managers is fully mobilized by various incentives. On the other hand, we should correctly handle the relationship between the personal authority of managers and the overall interests of the company, implement the principle of high transparency on the company's operating conditions and performance, and restrain the behavior of managers. Only by combining the incentive mechanism with the restraint mechanism and coordinating the interests of managers and shareholders can the interests of shareholders be fully safeguarded.

(4) Consider setting up a special institution to protect the rights and interests of small and medium-sized investors in the securities market, and further improve the investor protection fund

As mentioned earlier, small and medium-sized investors have a large number, a small shareholding ratio, and their own strength is weak. In addition, due to the difficulties in current litigation, it is difficult to protect and remedy their rights and interests after being infringed. Therefore, it is very necessary to set up a special investor protection agency. The securities investor protection agency has the following functions: first, it accepts reports and complaints, and coordinates with the securities regulatory authorities to investigate and investigate the illegal actors; Second, acting as an agent to protect investors' rights; Third, collect and analyze information on investor protection, and provide legislative suggestions and departmental coordination suggestions; Fourth, carry out publicity and education activities to improve investors' legal awareness and risk awareness. Fifth, track the securities market and compile information bulletin materials.

in order to better protect small and medium-sized investors and make investors get timely compensation for their infringed legitimate interests, the state has established an investor protection fund and promulgated the Measures for the Administration of Securities Investor Protection Fund. However, the fund has not been established for a long time, so it should be further improved in some aspects: first, broaden the source of the fund. You can consider increasing the punishment for the violator and including the fine in the fund; Or collect a certain fee in proportion from the funds raised by listed companies. Second, prevent moral hazard in fund operation. We should clarify the compensation conditions and compensation limits for investors, and correct investors' behavior of luring fund protection and blindly investing; It is necessary to seriously deal with and punish violators, and prevent brokers from unscrupulously carrying out illegal operations because they think that "there is a fund to pay for problems". Third, strengthen the legislative construction of funds, constantly supplement practical experience, and make the legal system more comprehensive and feasible. Fourth, appropriately broaden the scope of compensation, not only to compensate investors when securities firms go bankrupt, but also to extend the scope of compensation to false statements, insider trading, stock price manipulation and other aspects to fully protect the rights and interests of small and medium-sized investors. Fifth, improve relevant supporting systems, establish a unified decision-making and implementation mechanism, strengthen supervision over fund managers, and prevent fund abuse.

securities trading institutions should: (1) popularize the basic knowledge of securities. (2) Publicizing policies and regulations on financial securities. (3) Revealing the investment risks in the securities market. (4) Introduce various securities investment products and securities businesses, educate investors to choose suitable investment varieties and investment strategies according to their own investment preferences and risk tolerance, and establish a correct investment concept. (5) Publicizing the basic information of legal securities institutions. (six) to accept the consultation of investors and handle the complaints of investors.

investor education has become an important part of safeguarding investors' rights and interests. As the main body of individual interests, small and medium-sized investors should strengthen their own education, improve their legal awareness and risk awareness, improve their professional level and investment skills, and make rational investments.

1. Understand legal knowledge and enhance legal awareness

Investors should understand the relevant laws and regulations of the securities market and securities trading, such as the Securities Law, the Securities Investment Fund Law of the People's Republic of China, and the Measures for the Administration of Customer Transaction Settlement Funds. Understand all kinds of illegal acts that may infringe on their own interests and the corresponding self-protection methods. We should establish a sense of legal rights protection and actively use legal weapons to protect our legitimate rights and interests.

the legal ways to protect investors' rights mainly include:

(1) settlement through consultation. Negotiating settlement is a more direct way to deal with disputes. Experience has proved that a peaceful mind.