China's Securities Market Regulatory Study

Disclosure, transmission and utilization are three main steps through which securities information can be finally reflected on securities prices from its original source. Due to information asymmetry and different kinds of irrational and opportunistic behaviors in the process of information transmission, it happens frequently that securities information cannot be reflected efficiently on securities prices. This leads to securities market inefficiency. Compared with market mechanisms, securities information regulation is a better mechanism to overcome or relieve information asymmetry and market inefficiency.Owing to institutional, cultural, social and policy-triggered factors and the resulting opportunistic motives of organizations and individuals, there are abundant behaviors breaking laws and violating discipline, such as misrepresentation, earnings management, purchased auditing, fraudulent auditing, false information transmission, insider trading and etc, in the process of information transmission in China's securities market. As the result, market efficiency is undermined, both interests and confidence of investors are impaired. It's imperative to strengthen information regulation in China's securities market.Although much has been done in the area of information regulation, it is still far from enough. Improvements of legislation and enforcement are key points of strengthening information regulation. Detailed measures are included as establishing a complete system of laws and discipline, perfecting private laws, improving related institutional environment, upholding laws firmly, heightening regulation capacity, promoting enforcement cooperation and regulating the regulators more strictly.