What w88 live casino we do when faced with registration-based regulators
Hao Xuguang
(Source: Sina Finance2013-11-27 ）
These deviations of supervisors are no different from those of the supervisees. In other words, the rational level of supervisors is not higher than that of supervisees. This grim reality poses a great challenge to the implementation of the registration system in the future. Securities regulators w88 live casino be aware of their own irrational problems and must perform their duties of skill and diligence just like executives of listed companies. In the process of supervision and review of materials, regulators w88 live casino be responsible to the market and market participants just like professional managers are responsible to the board of directors and the company.
The "Decision of the Central Committee of the Communist Party of China on Several Major Issues Concerning Comprehensively Deepening Reform" clearly states that the reform of the registration system for stock issuance will be promoted. It is very rare for the registration system to be included in the party’s official documents, which shows that the top decision-makers attach great importance to the development of China’s capital market.
The understanding of the registration system must not be misunderstood to mean that there is no threshold for listing. The registration system has a threshold. Although administrative power is no longer used for approval, from this perspective it can be understood as a liberalization. However, from the principles of management, we know that liberalization requires strict management to support it. The registration system puts forward higher requirements for supervision.
The securities regulatory authorities w88 live casino actively promote the registration system reform from four aspects. First, improve one's own business capabilities and pay attention to one's own irrationality; second, change the regulatory concept, give full play to the decisive role of the market in resource allocation, and strengthen market restraint mechanisms in terms of financing methods, issuance rhythm, issuance price, issuance methods, etc.; third, strictly reform information disclosure supervision; fourth, strengthen supervision and law enforcement. This article focuses on the first question, and the next three questions will be analyzed in the future.
1.Supervisors must face up to their own shortcomings and deficiencies
The author once verified that my country's securities regulators have a priori assumption bias, immediate gratification bias and recall trap through a questionnaire survey with situational factors. It was found that the common factors are due to the fact that decision-makers emphasize subjectivity and ignore objectivity when selecting decision-making information, and are closely related to overconfidence.
Furthermore, through quantitative analysis of questionnaire data, we found that the proportion of overconfidence among securities regulators is higher than that of general managers. This result reveals the dual role of the system on China's securities regulators and the behavioral characteristics of regulators who focus on subjective preferences and less respect for objective circumstances under conditions of high public attention and high performance pressure(For details, please refer to the author's "China Industrial Economy"2013Year10Paper from issue“Research on behavioral deviations and correlations of Chinese securities regulators”)。
The author’s research also found that China’s securities regulators have varying degrees of self-serving bias, backward-looking bias and shirking of responsibility effect(For details, please see the author's publication in "Journal of Beijing Technology and Business University"2012Year5Paper of issue“Research on the correlation between irrational behaviors of China’s securities regulators”)。
And these deviations of supervisors are no different from those of the supervisees. In other words, the rational level of supervisors is not higher than that of supervisees. This grim reality poses a great challenge to the implementation of the registration system in the future.
2.Learn and reinforce skills and diligence
Learning from the governance issues of listed companies, supervisors w88 live casino improve their quality in accordance with the requirements of skills and diligence obligations. As far as the governance structure of listed companies is concerned, directors and managers of listed companies are regarded as special types of trustees and have obligations of skill and diligence to shareholders and investors of listed companies.
In this case, it is necessary to emphasize the nature of the objective standard of skill and diligence imposed on the principal persons in charge of listed companies,“Diligence”The term refers to the expected and proactive conduct of one's responsibilities in the management of a company's affairs.
The so-called duty of diligence, also known as the duty of good management and the duty of care, means that the company's directors, supervisors, and senior managers w88 live casino perform their duties to the company with integrity. They w88 live casino be diligent and cautious when managing the company's affairs. They must perform their duties with the standard of care that a reasonable person can achieve when managing their own affairs. They must take effective measures to prevent losses to the company's interests and work hard to achieve the best interests of the company.
Therefore, regulators must meet an objective standard of diligence, just as they do when managing their own affairs. When regulators review a company's issuance materials, they w88 live casino force the company to disclose relevant true information and truly understand the true information as if they were preparing to invest in the company. Before making decisions on material review, obtain information related to decision-making through various methods, and make prudent and comprehensive judgments and decisions on matters that require submission of registered company information. And this objective standard is the same for all parties.
When reviewing materials by securities regulatory authorities,“Do nothing”w88 live casino be disqualified from holding office. It w88 live casino be clear that just one sentence“I did what I could”This cannot be used as an answer to the accusation of failure to perform obligations. If he believes he is incapable of doing what he knows must be done, then he w88 live casino leave his position as supervisor.
In summary, drawing on the duty of diligence, regulators are required to be responsible to the market and market participants in the same way that professional managers are responsible to the board of directors in the process of supervision and review of materials.
Professional managers are responsible to the board of directors and the company. Diligence alone is not enough, skills are also required. In the same way, regulators w88 live casino be responsible to the market and market participants, and w88 live casino also require skills based on diligence.
It w88 live casino be noted that the trustee in the Trust Law is not a separate legal entity and operates on the basis of a consortium. In this consortium, the settlor enjoys the trust income and the trustee is legally responsible for the trust debts. Such differences determine that it cannot be used“Ordinary prudent person”Rules constrain the main persons in charge of listed companies to perform their obligations of care, skill and diligence, and managers of listed companies cannot be understood as complying“Standards of business conduct for ordinary prudent people”Trustees such as fund managers w88 live casino be allowed to have an operating space to take operational risks and allow them to show more entrepreneurial spirit.
Borrowing from the regulator’s duty of diligence, when the regulator reviews the issuance materials of a company to be listed, it does so as carefully and conscientiously as if it were preparing to invest in the company, forcing the company to disclose relevant and true information. If this is done, the material reviewers will not be held liable even if the issuer's fake product is eventually successfully marketed.
And“Skills”Said to be“Special job abilities”, it is not part of the ordinary qualifications of a rational person, but is the result of insights arising from special training and experience. This awareness requires those who engage in special skills to not only exercise a reasonable duty of care, but also to meet appropriate professional standards. If directors and officers of a public company fail to demonstrate a level of conduct commensurate with the requirements of their profession“Special job abilities”, without a proper understanding of the business they manage, they will not be able to make informed and correct management decisions related thereto. Clearly, having only a very limited, general and superficial understanding is simply not compatible with a management role.
Skills standards, the obligations of which are limited to subjective standards as they depend on the personal skills of the directors and managers of the company. This means that if they possess a relevant specialized skill, they will be judged against the standards of a competent practitioner possessing that skill. The person involved has higher skills, and the requirements for him are higher. In other words, there is an inherent objective standard for the duty of diligence, but the duty of skill depends on the particular party. Subjective obligations in terms of skills may affect the duty of care and diligence. The higher the qualifications of the party, the higher the requirements for the duty of care and diligence.
However, if the party does not possess any specific skills and does not possess any qualifications, the objective nature of his obligation cannot be reduced because there is an inherent or fundamental objective standard for the obligation of diligence. Regulators must have certain skills to be able to identify all fraud issues in the company to be listed when reviewing the materials of the company to be listed.
If the legal responsibilities of the main persons in charge of listed companies are extended to the scope of securities supervision, there are more issues that need to be considered. For example, regulators w88 live casino be able to provide basic services and ensure that the market has a fair mechanism.
Therefore, securities regulators w88 live casino be aware of their own irrational problems and must perform their duties of skill and diligence just like executives of listed companies. In the process of supervision and review of materials, regulators w88 live casino be responsible to the market and market participants just like professional managers are responsible to the board of directors and the company. Moreover, it requires both a sense of responsibility and the ability to supervise and review materials.
(Author: Professor and doctoral supervisor at the w88 casino of International Business, w88 casino.)
Attachment: Original report link:
http://finance.sina.com.cn/zl/stock/20131127/094517450157.shtml
