A Study On The IOP System In China

China securities market from the establishment till today, just the last two decades has made great development, IPO system as the basis for the securities market system has undergone continuous development and improvement from the past "administrative management" to nowadays "sponsor approval system" continues to depart from the government s control.Total Number of initial public offerings from 16 in 1991 increased to 2,087 in 2010, the total number of initial public offering of new shares from 3.5 billion shares in 1991, increasing to 267.58 billion shares in 2010, the total initial public, issue of new shares to raise funds from 1.09 billion yuan in 1991 increasing to 1.82723 trillion yuan in 2010,Issue have been expanding, market-oriented increasingly clear, complete this series of changes in the time it takes only a fraction of the Western developed countries.However, due to frequent changes of new share issuance system,and economic and cultural backgrounds are not mature, many of which defects have become increasingly prominent. Mechanisms such as the placing of new shares issued Institutional investors tend to lead to accumulation of a large number of new funding to fight in the primary market, small investors missed the subscription of new shares in the ballot, a market and a huge spread on the secondary market, the smooth functioning of money markets are also under threat, IPO-related legal system is not perfect led to insider expose of false information, and not effectively protect and encourage small and medium investors, is violated litigation costs alone is too high, can not protect their own interests, and more listed companies do whatever they want; Insufficient disclosure of information among the main causes of the issue of asymmetric information, opaque, violation of "Three" principle. After the reform of split share structure in the listed firm,the demand of reform of new share issue are gradually increasing.In order to improve the efficiency and fairness of IPO financing, China Securities Regulatory Commission officially announced "on further reform and improve the guidance system of issuing new shares," and shall come into force on that day, This indicates that China IPO market reform system entered a new stage. The reform improve the inquiry and subscription offer restraint mechanism, the formation of further market-oriented pricing mechanism; in order to optimize the online issuance mechanism, the object are separated from under the net and online purchase; to demonstrate fairness, set the upper limit on a single subscription account online However, even after this reform issue by way of allotment of funds, so that institutional investors and individual investors in the Game of the process, retail investors are still at a disadvantage in the ballot,but many are from institutional investors, While institutional investors can through short-term financing risk in the primary market for huge profits, individual investors balk at the idea, hope God gives luck in the lottery-like care. Honest quote and institutional investors lack the incentive, the cost of compliance is still low offer. In this whole process of issuing new shares, retail investors have little right to speak. Furthermore, in the current distribution system, the driving interests of institutional investors and its powerful control, resulting in high price-earnings ratio of new shares issued, With such a high price-earnings ratio is seriously out of the companys intrinsic value,irrational speculation will not be controlled. On the other hand, risk awareness of investors are still insufficient and investment philosophy is not mature enough, self-discipline should be strengthened.The article from the perspective of game theory find that issuers and investors with incomplete information dynamic game with incomplete information between investors static game, between institutional investors and small investors of the "Pigs" game and between the regulator and the issuer complete information static game, Economic theory from the perspective of information publisher and information asymmetry between the underwriters; information asymmetry between investors-the "winner curse" hypothesis; issuer information asymmetry between the investor-signal display theory; between underwriters and investors, information asymmetry-dynamic information gathering hypothesis. Discovery of new shares from the perspective of institutional economics characteristics of distribution system has three, rules.they are mandatory rules, endogenous externality of public goods and the interests of non-neutral, At the same time, from the perspective of institutional economics and the changing of the main reasons for institutional change. And review our regulatory approach in the IPO system, offering way, the history issue and other changes in the pricing system, putting forward new issues deepen the reform measures. This article on August 20,2010 China Securities Regulatory Commission issued the "IPO on deepening reform of the guidance (draft)" in the proposed IPO supportive of the reform in the way the views of, In addition, to better safeguard the interests of small investors, balance between efficiency and fairness, forward to the market continue has put forward some suggestions. For example, pricing re-enable control of price-earnings ratio; re-enable the market value of the Placing; the first day of the introduction of price limits; distribution system reform of underwriting, independent third-party distribution company announced the introduction of information; IPO-related legal system reform. Reform is a gradual process, this process requires not only the efforts of regulators, but also the main parties involved in joint coordination, joint efforts, and ultimately to success.