Securities Law-(Second Edition)

Author: Zhu Jinqing
Publisher:
Publish Date: 2007-01-01
Features: This is the lecture notes on securities law I wrote for the undergraduate law students of Hangzhou Business College. At the end of 1998, when the Securities Law was enacted, I happened to be scheduled to teach a securities law course for the class of 1996 in the spring of 1999. So, during the winter vacation of 1998–1999, I stayed indoors almost all the time, sitting in front of the computer writing the lecture notes. Spread out in front of me was a newspaper containing the full text of the Securities Law, and I occasionally referred to the Company Law, relying on the little knowledge of securities law I had accumulated from my studies and work, to write the lecture notes for the entire semester. Later, after several revisions and additions, it has been compiled and published. The feature of this book is that it combines the advanced experience of the United States with the actual development of China's securities legal system. Through a process of transformation, creation, and integration, it establishes a system and content different from previously published securities law books.
Chapter 1 does not include lengthy discussions on principles, sources, status, nature, etc. Instead, it starts directly and systematically explains the characteristics of stocks, bonds, funds, derivative securities, and investment shares, focusing on what securities are regulated by securities law.
Chapter 2 explains the issuance and trading of securities, analyzing the internal structure and actual operation of the primary and secondary markets, and briefly introduces China's securities market and the various entities involved.
Chapter 3 builds on the background knowledge from the first two chapters to delve into the basic principles of securities law—the protection of investors through public disclosure—and applies this principle to analyze China's current securities law, including approval systems, disclosure requirements, and the "principle of fairness, publicity, and efficiency." "A securities law, spanning tens of thousands of words in the end, boils down to two words: disclosure. Disclosure is the fundamental philosophy and guiding principle of modern securities legislation, the core and soul of securities law." However, what if disclosure is misleading? In that case, investors must be compensated for the losses they suffer—this is the content of civil liability in Chapter 4. Starting from China's civil law theory and introducing numerous U.S. case law and Chinese examples, this chapter elaborates on the four elements constituting civil liability under securities law as thoroughly as possible, aiming to achieve the following effect: investors read it and know how to file lawsuits, and courts read it and know how to adjudicate cases.
Chapter 5 focuses on insider trading, market manipulation, and fraud against clients—three types of illegal acts and their civil liabilities—building on the foundation of Chapter 4.
Chapter 6 deals with corporate takeovers, an area where securities law intersects with company law. The author focuses on the conflicts of interest among the three major stakeholders—acquirers, target management, and shareholders—and explains how the law should protect investors' interests while maintaining a balanced stance between acquirers and target management.
Chapter 7 explores China's securities market regulatory system and analyzes its issues and reform directions using the theories discussed earlier.
Chapter 8 provides commentary on the provisions of the current Securities Law. The entire book revolves around the basic principles of securities law, expanding layer by layer around these principles, with the philosophy of market trade freedom closely linked behind them. The idea of prioritizing market self-regulation while supporting government intervention runs throughout the book.
Additionally, the book pays attention to the logical coherence within the chapters and the systematic nature of the narrative. When explaining legal provisions, it highlights the economic realities behind the provisions, not only explaining "how" the provisions work but also exploring "why" they are structured that way, discussing their advantages or disadvantages, and proposing improvements. In terms of language and style, the book strives to break away from the rigid and formal tone often found in legal books in China, aiming to be lively, accessible, and engaging to enhance readability.
China's securities law theory and practice are still in their early stages of development. Only by truly recognizing the gap between China and international advanced standards can we understand how to catch up. In the field of securities law, how big is this gap? It can be quantified with the following analogy: If the United States has reached the level of university or graduate studies, China is still at the first-grade level of elementary school. I sincerely hope that the publication of this book can serve as a valuable reference for improving the research, teaching, and adjudication of securities law in China.