Legal Liability Configuration of Securities Intermediaries

Social Sciences in China (Chinese Edition)

No. 5, 2022


Legal Liability Configuration of Securities Intermediaries



Xing Huiqiang


With the deepening of the reform of China’s stock issuance system, China has introduced the gatekeeper theory proposed by American scholars and used it as the theoretical basis for increasing the liability of intermediaries, trying to promote the realization of the “gatekeeper” function of capital market intermediaries through severe legal liability. However, there is a limit to the severity of liability. If liability is too heavy, it contravenes the principle of “equal liability” and will not be conducive to the ecological balance of the capital market. The allocation of the legal responsibilities of intermediaries should take into account many factors including distributive justice, incentive compatibility, commercial logic and national competition, in order to achieve a balance of interests of all parties. The gatekeeper theory and system are fundamentally flawed. They should be replaced by the theory and system of “zhui shou’e” (investigating the ringleader) in a rational allocation of risks and legal responsibilities, and by strengthening zhui shou’e and determining precise punishment. On the basis of distinguishing between intentional and negligent acts, we should limit the application of joint liability. In order to promote the healthy, rational and coordinated development of the capital market, different liability limits should be set on the basis of distinguishing between liability in the public offering market and liability in the public trading market.