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Article: Securities arbitration in China: A better alternative to retail shareholder protection

TitleSecurities arbitration in China: A better alternative to retail shareholder protection
Authors
KeywordsChina
Security fraud scandals
Security fraud litigation
Securities arbitration scheme
Minority shareholder protection
Issue Date2013
PublisherNorthwestern University, School of Law. The Journal's web site is located at http://www.law.northwestern.edu/jilb/
Citation
Northwestern Journal of International Law & Business, 2013, v. 33 n. 2, p. 283-323 How to Cite?
AbstractThere is a large body of law and finance literature suggesting that strong legal protection for investors is the key to a nation’s healthy stock market development and economic growth. Despite remarkable progress in setting up its securities market, China has often been criticized for its underdeveloped regulatory regime. The wide securities fraud scandals that contrast with the paucity of conviction rates are indicative of China’s inadequate public securities law enforcement. Private enforcement efforts, such as securities litigation, help address the disconnect between the securities regulatory regime and investor compensation. Nevertheless, given the immaturity of China’s current legal and institutional framework, various factors preclude private securities litigation from playing an effective role in China’s market regulation and development. Against the background, this Article seeks to explore alternative mechanisms for improving private enforcement in China. After concluding that modeling the U.S. class action system is quite unlikely to work well in China’s sociopolitical and socioeconomic context, this Article explores how the present system of securities fraud litigation should be reformed in order to balance the competing interests of state control, social stability, and minority shareholder protection in the listed companies. In view of the dominance of retail shareholders in the Chinese securities market, and drawing on international experience, this Article proposes a cost-effective and accessible securities arbitration scheme in China for resolving civil compensation claims. This Article argues that the professionalism, procedural flexibility, speed, confidentiality, and cost saving features of arbitration offer much potential as a deterrent and remedial device in addressing the deficiencies of private enforcement of securities regulation during China’s economic transition.
Persistent Identifierhttp://hdl.handle.net/10722/183629
ISSN
2015 Impact Factor: 0.704
SSRN

 

DC FieldValueLanguage
dc.contributor.authorGu, W-
dc.date.accessioned2013-05-30T03:12:10Z-
dc.date.available2013-05-30T03:12:10Z-
dc.date.issued2013-
dc.identifier.citationNorthwestern Journal of International Law & Business, 2013, v. 33 n. 2, p. 283-323-
dc.identifier.issn0196-3228-
dc.identifier.urihttp://hdl.handle.net/10722/183629-
dc.description.abstractThere is a large body of law and finance literature suggesting that strong legal protection for investors is the key to a nation’s healthy stock market development and economic growth. Despite remarkable progress in setting up its securities market, China has often been criticized for its underdeveloped regulatory regime. The wide securities fraud scandals that contrast with the paucity of conviction rates are indicative of China’s inadequate public securities law enforcement. Private enforcement efforts, such as securities litigation, help address the disconnect between the securities regulatory regime and investor compensation. Nevertheless, given the immaturity of China’s current legal and institutional framework, various factors preclude private securities litigation from playing an effective role in China’s market regulation and development. Against the background, this Article seeks to explore alternative mechanisms for improving private enforcement in China. After concluding that modeling the U.S. class action system is quite unlikely to work well in China’s sociopolitical and socioeconomic context, this Article explores how the present system of securities fraud litigation should be reformed in order to balance the competing interests of state control, social stability, and minority shareholder protection in the listed companies. In view of the dominance of retail shareholders in the Chinese securities market, and drawing on international experience, this Article proposes a cost-effective and accessible securities arbitration scheme in China for resolving civil compensation claims. This Article argues that the professionalism, procedural flexibility, speed, confidentiality, and cost saving features of arbitration offer much potential as a deterrent and remedial device in addressing the deficiencies of private enforcement of securities regulation during China’s economic transition.-
dc.languageeng-
dc.publisherNorthwestern University, School of Law. The Journal's web site is located at http://www.law.northwestern.edu/jilb/-
dc.relation.ispartofNorthwestern Journal of International Law & Business-
dc.subjectChina-
dc.subjectSecurity fraud scandals-
dc.subjectSecurity fraud litigation-
dc.subjectSecurities arbitration scheme-
dc.subjectMinority shareholder protection-
dc.titleSecurities arbitration in China: A better alternative to retail shareholder protectionen_US
dc.typeArticleen_US
dc.identifier.emailGu, W: guweixia@hku.hk-
dc.description.naturelink_to_OA_fulltext-
dc.identifier.hkuros218546-
dc.identifier.volume33-
dc.identifier.issue2-
dc.identifier.spage283-
dc.identifier.epage323-
dc.publisher.placeUnited States-
dc.identifier.ssrn2263028-
dc.identifier.hkulrp2013/021-

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