The Legal Analysis Of China's Gem's Function Orientatio

Growth enterprise market, or GEM, shall serve as the intermedium market between the main board market and OCT market. The main board market is oriented to financing the mature enterprises at their late marketization and industrialization ages, while GEM is for the financing, evaluation, risk sharing and stock exchange issue of immature enterprises at their late infancy or early industrialization ages. Apart from such immature enterprises, GEM is targeted at risk preferring investors who share the risk and also potential rapid growth of those immature enterprises.China GEM is finally commenced at the end of 2009, ten years from the earliest attempt of constructing such a market in China. The first months of estalishment see some abnormal perfomance of GEM, which includes that most listed companies are much more mature than they should be; plenty of companies wait in a long line for IPO; a great deal of individual investors repeatedly buy and sell the stocks of only dozens of listed companies. The origin of those problems can be attributed to the failure of innovating stock market rules and too much administrative interference in IPO of GEM.The existing policy of GEM administration will cause wrong orientation of and affect the functioning of GEM, including enhancing and regulating the development of enterprises of medium and small sizes, accelerating science and technology progress, and fostering venture capital group. Right orientation of GEM counts on right regulations of it, especially right surveillance rules, among which the market access rules including threshold rules and IPO examination rules is most related to the orientation of GEM. Currently improper threshold rules and IPO examination rules are the major reason for the wrong orientation of GEM.Nowadays, the major stock exchanges in the world are in a keen competition for good company resources and many outstanding China private enterprises get listed in overseas stock exchanges. Against this background, it is extremely important to establish our own GEM for purposes of financing China's enterprises of medium and small size and facilitating the withdrawal of venture capital from the enterprises they invested. Wrong orientation and the failure of proper functioning of GEM mean China still doesn't have the GEM it needs. Therefore, this thesis intends to answer the question of what GEM administration regulations we need to give GEM right orientation through analyzing China's existing GEM market access rules and presenting some advise with potential help.The innovation of this thesis from the existing material in this area includes positive research method by observing the performance of GEM and its listed companies since its commencement and taking into consideration the keen competition for good company resources by stock exchanges and many China enterprises' listing overseas for the thinking of China GEM's market access rules.The outline of this thesis is as follows: the first chapter analyzes the background policy target through the apparent problems of China GEM; the second chapter researches the issue of normal funtioning of GEM and then gives the general principles the government shall follow when administering GEM; the third chapter tries to find out the flaws in China GEM market access and offering examination rules and the last chapter gives several solutions to the problems spotted.