The confidence of small and medium investors is the foundation for the steady and long-term development of the capital market.

Recently, the China Securities Regulatory Commission (CSRC) released a report on the progress of building a law-based government in 2025. In 2026, the CSRC will strengthen the protection of minority investors in the capital markets, promote the implementation of more representative lawsuit cases and advance compensation cases, and effectively enhance investors’ sense of gain.

At present, the number of A-share investors in China has exceeded 250 million, and the overwhelming majority are minority investors. The broad base of minority investors is the foundation of the capital market. It concerns not only the vitality of the stock market and investor confidence, but also the overall situation of reform and development of the capital market. For precisely this reason, the securities regulatory authorities have always placed strengthening the protection of minority investors at the very top of regulatory priorities.

Meanwhile, trading activity in the A-share market has remained active and the number of new account openings has been rising, with minority investors taking an enthusiastic part. Under these circumstances, the regulatory authorities take initiative and shoulder responsibility, continuously increase efforts to protect minority investors, and promote the implementation and effectiveness of various institutional arrangements.

In fact, strengthening the protection of minority investors is not only an inevitable requirement for carrying out the mission of serving the public through finance, but also a key move to lay a solid foundation for the long-term stable development of the capital market, deepen comprehensive reforms in investment and financing, and promote high-quality development of the market. The author believes it carries three profound and far-reaching significances.

First, it stabilizes investment confidence and strengthens the foundation for market operation.

In the A-share market, minority investors, who hold an absolute numerical advantage, are an important source of market vitality and also a fundamental support for the market’s operation. Their confidence is directly related to the market’s valuation logic and operating resilience.

By integrating minority investor protection throughout the entire process of institutional design and regulatory enforcement, regulators can truly unleash the centripetal force of long-term investing, so that investors are willing to hold shares, dare to plan, and form stable and rational market expectations.

Only when the lawful rights and interests of minority investors are fully respected can the market have greater resilience in self-repair and maintain steady operation amid complex conditions. Protecting investors’ rights and interests is both a safeguard for steady market operations and a prerequisite for high-quality development.

Second, it addresses shortcomings in rights protection and maintains a fair market order.

In the capital market, minority investors generally face disadvantages such as information asymmetry and weak professional screening ability, and individual rights protection often encounters the real difficulties of high costs, difficulty in providing evidence, and long timelines. Representative lawsuits, advance compensation mechanisms, and other systems are precisely the tools through which regulators compensate for the shortcomings of individual rights protection through institutional supply.

This institutional arrangement regulates market order from two dimensions: on the one hand, it raises the cost of illegal conduct and strengthens regulatory deterrence. Representative lawsuits turn dispersed claims for compensation into collective action, greatly increasing the economic costs of violations; advance compensation enables affected investors to receive compensation quickly. Together, and in coordination with administrative penalties and criminal accountability, they build a three-dimensional regulatory deterrence system. On the other hand, it optimizes the market ecosystem and builds a fair “bottom line.” Enforceable channels for relief turn abstract legal rules into fairness and justice that market participants can perceive. Ultimately, this is both substantive protection of minority investors’ rights and interests and a source-level safeguard of fair market order.

Third, it enhances investors’ sense of gain and promotes coordinated development between investment and financing in the market.

For a long time, regulatory authorities have continued to optimize institutional arrangements for protecting minority investors, aiming to enhance investors’ sense of gain, including effective remedies when rights are infringed and reasonable returns in fair trading.

From the investment side, when investors can genuinely feel that “rights are protected, damages have remedies, and returns are predictable,” their behavioral pattern shifts from short-term games to long-term commitment to value, forming a stable and sustainable supply of capital. From the financing side, investors’ rational choices in turn exert effective constraints on listed companies. As capital gathers in companies with standardized governance and a focus on returns, it pushes listed companies to improve governance quality and enhance efficiency, thereby promoting the effective operation of a mechanism for survival of the better and elimination of the worse. This drives dynamic coordination between the two ends of investment and financing, improves resource allocation efficiency, and lays a solid foundation for the long-term stability and lasting order of the capital market.

It can be expected that, as more investor protection cases—such as representative lawsuits and advance compensation—are implemented and prove effective, market confidence will be further boosted, the fair bottom line will be even more firmly secured, investors’ sense of gain will continue to strengthen, and the foundation for high-quality development of the capital market will become increasingly solid.

（Source: Securities Daily）