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Preliminary Study on the legal system of the stock over-the-counter market

Author: TangZuo From: www.yourpaper.net Posted: 2010-06-04 11:52:09 Read:
[Paper Keywords] stock over-the-counter market maker
[Abstract] "initial public offering of shares and listing on the GEM management Interim Measures for the introduction of to build basically completed, the system of multi-level floor trading market means that China's stock. However, at the same time has made great achievements in the development of China's stock exchange-traded market, but no substantive progress in the development of over-the-counter market. Thus, in the era of post-GEM stock over-the-counter market system system should be built to promote the rapid development. This paper argues that the differentiation of the legal status of the stock over-the-counter market system should follow the five principles of OTC companies civilians, investors, trading, innovative ways of regulatory system more efficient.
In the after GEM era, vigorously develop the stock over-the-counter market will undoubtedly be the most important task is to promote multi-level stock market system. The history of the development of China's capital market successful experience has shown that the system of rules is an effective way to promote the development of the China's stock over-the-counter market, I believe that the following measures should be taken to build the legal system of China's stock over-the-counter market.
I. Legal differentiated positioning
Theory and Practice has proved that the stock market should include multiple levels, to link the investment and financing system, as far as possible to meet the investment and financing needs, and promote optimal allocation of capital. In general, multi-level stock market system should include the motherboard market Exchange market, mainly for financing and transfer of large, mature companies: Growth Enterprise Market (GEM), corresponding with the motherboard, designed for small and medium enterprises in the stock market the stock market and high-tech companies to provide services; OTC market, corresponding with the stock market, specializing in over-the-counter reach conditions and a reluctance of small and medium-sized enterprises listed on the stock exchange in the stock exchange .
The world's major countries and regions basically established a multi-level system of the stock market with the conditions in the countries to adapt. The stock market is the most developed in the United States, for example, with the motherboard market, including the national New York Stock Exchange and the American Stock Exchange; local stock exchange, such as the Chicago Stock Exchange, the Boston Stock Exchange; OTC markets, including the NASDAQ, OTCBB, PINKSHEETS market. In the United Kingdom, in addition to the London Stock Exchange Main Market and equity financing services for some of the higher standard of small and medium-sized high-tech enterprises AIM second board market, SME financing services for more junior unlisted public company stock market, the third board market (OFEX). It is for a large number of small and medium enterprises to provide specialized electronic networks offer trading unlisted public company stock transfer market. Taiwan, China also established a multi-level system of the stock market, including the Taiwan Stock Exchange, Taiwan GTSM market and emerging markets.
The other hand, China's stock market is far from perfect, largely confined to the Shanghai Stock Exchange and Shenzhen Stock Exchange two national exchange-traded market. The local over-the-counter market on the end of the century were all closed, the OTC market is limited to the Shenzhen Stock Exchange, the agency share transfer system as well as all over the property rights trading market, these markets compared with foreign countries, there is not standardized not uniform, dysfunctional many defects can be said that China has not yet established a real over-the-counter market.
Relative to China's Shanghai and Shenzhen board, small board and GEM market, over-the-counter market should be targeted at multi-level stock market on the basis of market together constitute the liquidity of the stock market and the exchange market. As a basis for market, it should be in the main body of investment, over-the-counter transactions and regulatory institutional arrangements reflect the comparative advantages, to meet the specific levels of the main investment and financing needs: motherboard targeted at mature businesses, focusing on the size of the company and efficiency; GEM targeted at the development of the high-tech enterprises, emphasis on corporate growth; OTC markets should be targeted at start-up stage growth companies, OTC minimum threshold, pay more attention to improve the structure of corporate governance and information disclosure the authenticity, accuracy and completeness.
In addition, as the basis of the stock market system of multi-level market, the OTC market can and should also be established with the exchange market an interconnected mechanisms: on the one hand, when business growth to a certain extent into the motherboard market, so as to provide a venue listed on the market channel; On the other hand, even for those who have completely lost the qualifications listed on the Main Board seriously insolvent company to provide a reasonable exit channel, thus ensuring the quality of listed companies in the exchange market, and reduce the the delisting of the shares are traded on the exchange-traded market turmoil.
OTC enterprises civilians
According to the positioning of the stock over-the-counter market. OTC companies in this market should mainly include two categories, one does not meet the listing requirements of the Main Board and Growth Enterprise Market delisting companies from these markets; another type there is not yet on the Main Board and GEM market-listed companies, these companies will be mainly the majority of small and medium enterprises, especially high-tech private SMEs in stock. For the first class of OTC companies, just as the stock over-the-counter market after its delisting buffer market, as long as the performance of some programs, there is no particular OTC conditions require it issued stock in the market transactions: However, for the second category of companies listing requirements need to be further clear. And
From the extra-territorial point of view, the vast majority of the world countries and regions, over-the-counter market over-the-counter threshold is very low, almost does not require special listing requirements. OTCBB market in the United States, for example, the market is almost no requirements of any size and profitability, after the SEC approved, more than three market makers are willing to, you can apply to the NASD OTC securities market making. Another example of Taiwan, China, emerging market, the listing requirements of the market is also very loose, as long as the total assets of the OTC enterprises in more than 30 million New Taiwan Dollars and accumulated losses, the establishment of the full fiscal year, the revenue of the company There are no requirements. Prior to meet these conditions. More than two securities firms are willing to recommend the enterprise and market-making, you can apply over-the-counter. In addition, in recent years, the fast-growing over-the-counter market in Korea - South Korea's third market, nor the OTC market the company's financial condition, assets status of any number of requirements.
In order to allow more SMEs access to development funds through the stock market. OTC OTC market conditions should be substantially lower than the market on the Main Board of the Shanghai and Shenzhen SME Board and the upcoming GEM listed conditions. However, due to China's current credit system is not perfect, I think, should not be copying the the extraterritorial experience, "no threshold" over-the-counter system to take almost no requirements on firm size and business records. The contrary, the initial stage in the market compared with extraterritorial more stringent listing conditions should be taken to develop the market, when the market is ripe and then be appropriate to relax the conditions listed and over-the-counter market should pay more attention to the growth of the OTC enterprises, rather than profitability. Thus, regardless of the strength of their size and profitability is OTC, standardized operation is the key.
Third, investors institutionalized
Of the Main Board and Growth Enterprise Market, stock over-the-counter market OTC standard is lower, often small in scale and over-the-counter, OTC securities liquidity is poor, the risk faced by the investor with the motherboard and GEM market investors compared to much larger. In this case, out of the need to protect the interests of investors, the market should be introduced to the system of "qualified investors", the investor must have a certain ability to identify risks and risk are allowed to enter. In order to develop the market and protect the interests of investors, especially individuals and small and medium investors, established early in the market should only allow securities firms with strong capital strength and risk tolerance, funds, insurance, finance companies, venture capital institutions and private intervention funds and other institutional investors, individual investors temporarily can not be directly involved in counter market transactions. Individual investors only by way of participation in companies, partnerships, funds and other economic organizations, and indirect investment in the OTC market, wait until after the development of the market to a certain level of maturity, and then release allows a certain degree of risk identification and affordability qualified individual investors to invest directly in the over-the-counter market.
In fact. China's GEM has been established investors access system, the initial public offering and listing on the GEM Interim Measures provided for in Article 7, the GEM market should be established investment investor risk tolerance of the people by access system, fully disclose to investors the investment risk. "With the establishment and operation of the GEM investors access practical experience on the OTC market system construction to give a valid reference.
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