On The Development And Surveillance Mechanism Of The Small-Cap Market

It has been known dial (lie small iiinl iiirdiiiin si/cd firms , particularly the last growth of Ilic .small hi^h條cclinolojj\ linns , which brin^ not only a lot of new jobs hut also (lie expansion ol export and the leveling梠ff in technological innovation , have increasingly become (he most dynamic factors in the economic- progress ?Nowadays , economists often regard the small lii|>li--lccliiiolo}>y firms as the engine of the economic j^iotvlh . At (he same lime , (he hi^h investment and hif>li risk and hi|;h ^lowth ol (he small梩echnology firms have challenged the traditionally linanciiif> mechanism , which has been famous lor (he low risk . Naturally , the demand ol new financing mechanism ,which can merely solve (he shortage ol' capital in the small hifjli梩echnology firms , has licen loslcicd . So (he ventnie capital market has wholly changed the traditionally linaiicin^ mechanism in order to f^o alon^ with this demand and to shape a capital input梠utput mechanism, which can he snilahle lor the development cycle of the small hi^h?technology lirms and the indiisln conceined . As the second market of the venture capital market , the small cap market connect the venture capital with (he technological innovation and the financing market and (he company management hy the eoiivenien( "exiling channel " .Moreover ,it also creates the withdrawal platform , >vliich join the fast梘rowth expectation towards the small high梩echnology linns to (he puhlic venture capital investment . Alter (he small hi^h (ccliuiili^y linns ;>o public , (lie initiative and crcativcncss of the human resources or professional staff , who participate in the venture capital , can lie transferred to (he market value梐dded , the technological innovation also acquire (he market recognition .So far the Nasdaq market is the only most successful small梒ap market around the globe , which launched in I('7I , and above all had adopted (lie electronic transaction networks and the multiple market maker system . In terms of (he dollar volume of trading , (he Nasdaq market,which listed some international companies , lirstly surpassed the INcuYork Stock Exchange in 1994 and became the world's second largest stock market . The small梒ap market lor small companies have established by all major European countries from the beginning of Hie 198U's . Hie .small梒ap market were intended (o promote equity finance by enabling more companies to go public , such as the "Unlisted Securities Market " of the London Stock Exchange and (he "Official Parallel Market " of the Amsterdam Stock Exchange as well as the "Second Marche' " in France . Due to the Haws in Hie design of these markets , at the beginning those markets grew rapidly and were very active , but before long the new market dried up and became increasingly illiquid . Since 1990, some European countries have modeled alter the Nasdaq market and attempted to build up the small -cap market again , for example the Easdaq market and the Alternative Investment market and the EUHO.NM .As the organization of (lie highly centralized and comprehensive venture capital system , the small梒ap market ,whose surveillance mechanism and operation try to decrease (lie adverse selection and moral hazard of traditionally financing mechanism , emphasize the transparency and liquidity and stability in the market operation. The surveillance mechanism of the small梒ap market , which aims at the trading system , consists of the philosophy of surveillance and Hie surveillance organization and the investor protection and the disclosure regime. The small梒ap market works on the basis of "strong disclosure regime" and " buyers beware " . Moreover, the philosophy of surveillance decide (he strong disclosure regime (o become the core of surveillance mechanism . The organization for the small梒ap market is divided in(o (wo vertical section , such as the Securities Surveillance Hoard and the surveillance segment in thesmall-ap market . The investor protection depends on the integrity of market structure and the fairnes...