Study Of Importing The Competitive Market Maker Mechanism Into Chinese Securities Market

Chinese securities market has experienced ten years' ups and downs in pursuing of the right way for its development, all along with the arguments. From one perspective, it is one of the most important fruits from reform and the opening to the outside; it has played a key role in accelerating the restructure of the national economic structure and establishment of the modern financial mechanism; from the other perspective, due to the deficiencies of the current structure and mechanism, the securities market has been deemed as the seedbed of the indecent stories, and thus was condemned by some of the public. In light of the above, we pay much attention on the problems existing in the current Chinese securities market. If the said problems can not be solved in time, the securities market will suffer a lot from instability, which will also limits its future development.In the thesis, our author did some research work on the operational experience in competitive market maker mechanism in overseas developed market, made analysis on the current situation and characteristics of the domestic securities market, proved the necessity for the import of the market maker mechanism and devised the preliminary framework of the mechanism in China, and finally put forward some practical suggestions in the implementation of the mechanism.During the research, we found that the basic characteristic of the current Chinese securities market is a weak efficiency market. The fact that the concentration of the stock holding substantially correlates the fluctuation of the stock price proves that bankers do exist and take control of the price in behind. Given the existence of many illegal bankers, the market transactions are actually lack of liquidity in consideration of the stock exchange ratio and the price fluctuation. In additional, the volatility of the Chinese stock market has ranked top lines in world major securities market.Competitive market maker is a kind of "transparent banker" mechanism, which is widely adopted in the overseas developed markets. The mechanism takes the advantage of improving the transparency of the market information, stabilizing the price volatility and enhancing the liquidity of the transaction by means of introducing the competitive public quotation mechanism and the open competition of the bankers in realizing the price finding.Although currently we had some realistic obstacles in introducing the competitivemarket maker mechanism such as the lack of eligible bankers, insufficiencies of legal support and incompleteness of the supervision and so on, it can be an effective supplementary to the current transaction mechanism. The establishment and implementation of the competitive market maker mechanism in China can be a practical operation in promotion of the healthy development of the Chinese securities market on the condition that we can design a reasonable implementation details and carry out the project step by step.