| To help raising funds for small and medium-sized enterprises is one of core functions of the SME board. The SME board is not only as a financing platform, but also a key step toward the construction of a new market. Approved by the State Department and the Chinese Securities Regulatory Commission, the Shenzhen Stock Exchange launched the SME board on May 27, 2004, and welcomed its first listing on June 25, 2004. By the end of 2004, there are 38 newly listed companies, raising 9.108 billion Yuan in total, with total shares of 3.22 billion, among which 960 million shares are floated. Due to their typical features, the small and median companies bear more risks after listing. According to some statistics, these risks mainly fall into three facets. Firstly, the relative small size of companies leads to unstable revenue and profit expectations. Secondly, immature corporate structure and the strong control of influential shareholders make for room of fiduciary risk. Thirdly, vibrant price movements bring on additional market risk, such as manipulation and liquidity risks. To solve these problems, the stock exchange need to establish a set of surveillance measures, which include listing sponsorship mechanism beforehand and real-time rigorous monitoring and discipline regulations. Efforts are needed on improving public offer and listing mechanism, trading and surveillance system, corporate governance and delisting regulation as well. This article intends to raise some discussions on the above areas. The first chapter introduces the subject background and the development of the SME board. Focuses are put on the signification that the SME board brings on to reform of sated-owned companies, social stability, flourish of city and rural economies and enhanced function of the stock market. The main risks of the SME board are discussed too. The second chapter describes the new share issuance and listing requirements and procedures for small and medium-sized companies in detail, and the features of share issuance approving system. The approving system requires a listing candidate to fully disclose its information genuinely, and at the same time to meet necessary qualifications set by law and the regulations. The regulator is entitled to reject an application, in the case of a candidate company fails to meet the qualifications. The regulator reaches its decision after looking at a candidate's corporate structure, operation, asset structure, business prospect, management, competitive advantage, etc. Chapter three talks the information disclosure arrangements, covering time, context, manner and quality of information disclosed. This chapter discusses the main problems in information disclosure and the directions and areas for improvement, such as an increase of disclosure frequency, shortening of disclosure interval, briefing of unaudited annual report, inquiry-response mechanism and effective problem-shouting system. Chapter four looks at the trading monitoring area, mentioning the process, status quo and the problems existed. The problems involve that of at law, regulation and rule level, implement system, structure of trading information and the efficiency of trading monitoring. Seven frequently-used measures are put forward, such as warning, referring and trading restriction, etc. Chapter five introduces oversea stock exchanges'experience in regulation of trading and information disclosure, and points out the direction for future efforts. An effective disclosure system, by applying interactive, multiply and consecutive inquiring information disclosure, leads to a more transparent and efficiency market. In addition, this chapter compares the trading monitoring technology of some countries and summarizes their common function. The main monitoring instrument and tools of trading monitoring are suggested, which include alerting system, data-digging technique and appraising technique, etc. Chapter six concludes the previous discussions. Suggestions are dropped into two areas. For information disclosure, web-based measures are proposed to be implemented, rule-driven form-auditing system be replaced by target-oriented inquiry-and-response system. For trading monitoring, one hand is supposed to facilitate innovation at the stock exchange level, another hand to call on and promote the betterment of related law, market fidelity, investor consciousness and corporate governance, so as to improve the environment at large. The innovation of the trading regulations at the stock exchange level should learn the successful practices on oversea markets and take into consideration of our own reality, with the purpose of maintaining a just, transparent, and fair market by increasing the cost of wrongdoings. All innovations on laws and regulations aiming at increasing the cost of wrongdoings would be acceptable in theory. There are two ways to achieve such innovations. Firstly, disciplines like information disclosure and abnormal trading break can be implemented to increase the transparency and to alarm the market risk. Secondly, enforcement can be strengthened by creating sound procedures for trading monitoring and disciplines enforcement. The two ways... |
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