What supporting reform measures can be taken for the sponsor’s liability insurance system
Compatible with the securities sponsor liability insurance system, in the sponsor Corresponding supporting reforms are also needed in the human system.
(1) The application of the "double sponsor system" in the Mainland Transition to the "single sponsor system"
The mainland securities market is now The sponsor system implemented is the "double sponsor system". This system emphasizes the responsibilities of the sponsor representative and the sponsor institution, while the responsibilities of the sponsor institution mainly rely on the sponsor representative.
This creates a tendency for sponsor institutions and securities market investment banking businesses to rely too much on sponsor representatives, and as sponsors The sponsoring institution of the representative's working platform is in a secondary position and cannot assume the corresponding functions and responsibilities.
In fact, the sponsor representative’s ability to bear responsibility and the rights he enjoys are asymmetrical, and the sponsor representative is also unable to bear the related risks and losses caused by it. If something happensFor example, when major information disclosure issues cause heavy losses to investors, only the sponsor can truly bear responsibility.
Most sponsor institutions use joint ventures, and the responsibilities of the sponsor representatives should not be over-strengthened. Hong Kong's sponsor system emphasizes the overall capabilities of the sponsor firm (or institution) rather than overemphasis on the capabilities of professionals. This is worth learning from the mainland securities market.
The sponsor system returns from the "double sponsor system" to The "single sponsor system" is to strengthen the functions and responsibilities of the sponsor. The sponsor representative only functions as a professional of the sponsor, and the relevant senior managers of the sponsor must jointly perform the corresponding investment banking business functions and share responsibilities. Liability, the securities regulatory authorities only manage the qualifications of sponsor representatives. The securities "single sponsor system" and the sponsor liability insurance system have inherent unity.
(2) Establish liability arbitration for sponsors System
In the sponsor's sponsorship business, it involves Coordination and cooperation of sponsors, issuers and other intermediary structures. If a major accident causes losses to investors, the cause of the accident will be more complicated. This requires clarifying responsibilities and identifying the main reasons for the accident.
No matter what kind of accident and for whatever reason , since the sponsor is the general coordinator, the sponsor should generally bear part of the responsibility.
However, in these quality or liability accidents, the sponsor may bear primary liability or secondary liability, which requires investigation and arbitration. Since the sponsor's qualification review and the sponsor's practice process are subject to Supervision by the securities regulatory agency, therefore the regulatory agency must also exercise its arbitration responsibility for sponsor quality accidents. Of course, if the sponsor, issuer, other intermediaries and investors have objections to the arbitration by the securities regulatory agency, other laws can also be passed Solution.
The editor’s summary ends here. If you have more questions in this regard, you are welcome to consult the Legal Savior Network. The Legal Savior Network provides professional legal consulting services, and a professional team of lawyers will answer your questions.
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