Securities Market Regulation

From a perspective of economics and law, this paper makes a fundamental research on securities market regulation. In this paper, a systemic and standard theoretical framework is constructed, which is regarded as innovative in the field of securities market regulation research; also, a research and evaluation of China's securities market regulation system are made.The basic theories in this paper could be categorized into five sectors: why to regulate? (reasons) For whom to regulate? (targets) How to regulate? (measures) How to optimize regulation? (incentive structure) And how to execute regulation? (organization structure) My research indicates, securities market is a market with strong asymmetric information and externalities, which constitutes the most basic reason for external regulation. While to construct a fair trading environment and to provide sufficient protections for investors are also the needs of justice and ethics. As regulation targets are concerned, efficiency, financial stability and security and fairness should generally be included despite of the fact that differences may exist in targets combination for individual country. The measures employed in securities market regulation are deeply diversified. A comprehensive regulation system covers almost every aspects of market, while in this paper, more attention is given to measures aimed at information disclosure and anti-fraud. Optimal regulation could not be achieved automatically. Securities market regulation is essentially an inter-action of regulators and regulatees. An efficient incentive-constrain institutionshould be designed to warrant a virtuous inter-action. The last part of basic theories covers regulation organization structure. How to design a organization structure, within which regulation overlapping and ignorance could be avoided at least expenses would be intensive studied. Also, more constraining elements would be analyzed in choosing between the forms of multilateral and single regulation.The settling point of this paper is the conclusion and evaluation of China's securities market development and regulation. Although, China's securities market only have a history of over ten years, great achievements have been made. But, several problems still exist due to various constraining factors in the market's development. These problems includes: the misalignment of securities market functions; the incomplete law system; the divergence of regulation logic; the less developed trust network; and the occasional appearance of fraud and swindle, etc. So, how to enhance the development via regulation and how to improve regulation via development remains to be an very important and brand new topic.