A Research On OTCBB Disclosure System And Its Enlightment To Chinese Counterpart

In order to re-allocate risks rising from asymmetric information among investors and people who need money, legislators emphasize using effective disclosure systems to protect investors in securities market. Many systems of OTCBB which is the most successful OTC market in the world are accepted or widely used as a reference by other countries when they establish their own OTC markets.Because the Chinese third-board market, OTCBB counterpart in China, has been just established, many of its legal systems, including disclosure system are far from satisfaction. Moreover, some legal rules are now facing an awkward situation when being applied under current legal environment. The OTCBB disclosure system has been a rare target for relevant academic researches with respect to the OTC market. Relevant academic achievements are in eager demand and the lack of academic achievements is in disproportion with the demand by the fast development of Chinese securities market.This paper presents a systematic research on the OTCBB disclosure system and its Chinese counterpart from a jurisprudential perspective, the contents of which are as follows:1.The author is of the view that the establishment of OTCBB disclosure system is an embodiment that legislators highly value the principals of openness, compulsive and continuous disclosure and investor protection. The legislators carefully balance the benignity of participants in the OTCBB market.2. OTCBB self-discipline supervising system and civil actions as the main remedies provide a good legal environment for OTCBB disclosure system.3. Based on comparative analysis of disclosure systems between OTCBB and NYSE, the author is in the view that differences in market positioning, trading systems, supervise systems are the three fundamental factors which make the OTCBB disclosure system special.4. At last, the author discusses main problems of disclosure system in Chinese third-board market, and makes proposals that China shall establish systems equal to OTCBB EDGAR electronic system, which can give timely feedback of every trading,; shall apply annual report and quarterly report as the periodic reports; shall establish civil actions as soon as possible in Chinese securities market; cultivate mature securities traders to be the market makers; shall set up a special legal body of financial group to bear the responsibility of supervising disclosure activities, etc.