An Analysis On The Efficiency Of China's Securities Regulatory Institutions

Securities regulatory institution is a general series of system, which is legislated according to the country's basic laws and the principle to controlling the market risk, protecting the legal right of participator, promoting the growth of national economy, so the government and its regulatory bureau can eliminate securities market failure through it. It is generally put into practices by legislation and public policy. In fact, it is a compulsory rule, which forces the regulated to sacrifice the self-interest to produce on the point of maximum social welfare to attain the efficient allocation of resources. However, the reasonable enterprise won't passively accept the regulation of government because it is contrary to the target of its furthest profits, and will take all kinds of measures to evade regulation and protect its self-interest. This usually causes that the regulation can't carry out steadily, so the target of government is difficult to realize, even goes contrary to its wishes. Therefore, the gains or losses of regulation must be weighed, and the cost of regulation must be investigated. Also is to say, the efficiency of securities regulation must be weighed.It needs cost to legislate and perform regulatory institutions. The cost-benefit is called operating-efficiency of securities regulatory institutions. The influence on stock market development and economy rising is called general-efficiency.The choice of securities regulatory institutions is decided by the target expectation of government in different history term. Success or failure of regulation and high or low efficiency of regulatory institutions are determined by that the government's design is appropriate or not. Maybe some problems really are caused by regulation's failure, but it is not the excuse to deny the regulation. It is necessary to adjust and improve regulatory institutions, but not reduce or deny. It is important for government's participation to be well designed to establish appropriately its target, principle and scope and take carefully it into practice. All institutions are mutually contacted restricted, and constitute a whole system. In some cases, a part of rules in market decide (or be decided by) other rules. For this reason to investigate the regulatory institution and its efficiency must be from the standpoint of contact. And all these must be for the sake of eliminating market failure and developing social economy. Therefore, it is not perfect and accurate to weigh the efficiency of Chinese securities regulatory institutions just by operating-efficiency in the compulsive reform and lowly operation stock market. It must be weighed by general-efficiency. Even to say it is more perfect and accurate to weigh the efficiency of regulatory institutions from the angle of general-efficiency in China. The efficiency of regulatory institutions is finally incarnated whether the regulation availably eliminates market failure and develops the economy. In fact, the general-efficiency of regulatoryinstitutions includes the contents of its own.There are two basic functions of the stock market. One is financing, which means the funds is from owner to user, saving is converted into investing, and social and idle funds is transferred to producing. It could make it possible for enterprise's production and extend reproduction to become into a reality and develop economy. Another function is allocation of resources, which guides the funds from the section of the low benefit to the high benefit to realize efficient allocation. But if the market fails, the market mechanism won't complete efficient resources allocation, it must be by dint of the government's compulsive regulation. Securities regulation will bring the stock market function into play adequately and increase the efficiency of stock market. Could securities regulation availably guide the capital's reasonable fluxion and realize efficient allocation? From the "efficient market hypothesis", numerous scholars think Chinese stock market is a weak form EMH or ineff...