| Modern market maker system came into being in the U.S. NASDAQ in 1971, Market makers quote continuous two-way with own capital market transactions, bearing legal obligations and enjoying special rights in certain circumstances. Market maker system improves the liquidity of NASDAQ market securities greatly, trading continuity, and to promote market stability and enhance market efficiency and price discovery function, but also to facilitate the balance of market information., NASDAQ market came into the golden period of development after two decades of development, exploration and reform, the status of the U.S. stock market is rising steadily over the New York Stock Exchange in 1994 to become the world's largest securities market. The NASDAQ market shocked the world stock market crash took place in 2000, then many people questioned the NASDAQ and the market maker system, but the NASDAQ which is supported market maker system market maintained the strong flow and profitability compared with other OTC markets, many listed companies grown as a world-class leading companies. China is developing multi-level, three-dimensional system of capital market actively. The system consists of four different levels of the Main Board, the SME board, the Growth Enterprise Market and the OTC market. GEM is an important market for innovative corporate to finance and to grow, which is also ideal for venture capitalists. Decade of grinding sword. China was finally opening the GEM by the end of October 2010, but China did not use the market maker system which was born in the GEM d and widely popular in the GEM. It was exposed that the market overvalued, stocks differentiation serious and strong fluctuations in prices or other issues, and a strong risk of being manipulated after the GEM running for some time. Whether the reflection a little bit in the system design? Do we fully understand the market maker system? Is there a clear understanding of the growth enterprise market problems? The author wrote this article to discuss these issues. This paper is divided into the following three chapters:Chapter I: the basic problems of market maker system. First, the author defines the three elements for defining market makers by comparing and analyzing foreign theorists and the enactment of legislation. The market maker is defined as: dealers who continuous two-way quote, transacting by virtue of own capital market, and bearing legal obligations and to enjoy special rights in certain circumstances. According to different standards, market makers have a variety of categories. According to market makers "market making" of the market characteristics and the relationship between the market makers can be divided into competitive and monopolistic market maker market maker; rights under the Stock Exchange market maker content on the different provisions can be divided into designated market makers and the general market makers; according to market makers target, the form and scope of business can be divided into the retail market makers, wholesale market makers, local market makers and institutional market makers. The author discusses modern market maker system and development process by using the empirical analysis and the historical analysis. Secondly, the author demonstrates the operation of the market maker system mechanism and function, points out that the market maker's market-making services market and the market maker's own dual needs of the market maker system has to improve the efficiency of transactions, price stability and maintain continuity of transactions, price discovery functions. Finally, the author discusses the impact on overseas securities markets of the market maker system.Chapter II: rights and obligations of market makers and the risk prevention for market maker system. This part, the author first analyzes the rights and obligations of market makers, primarily the right to short right and the right margin, information priority, special management rights, in particular, offer the right content, obligations are primarily two-way quotes, spread limit, special occasion of the sale of obligations, serving constraints, information disclosure and so on. Next, the author discusses the risks and how to prevent them in market maker system, focusing on three aspects which are the inventory position and avoid the risk, information risk and aversion, risk and avoid market manipulation.Chapter III: the market maker system on the impact of China's securities market. First, the author discusses China's securities market maker system in the development and status, pointed out that China is constantly drawing, introduction, adoption, assimilation of foreign mature and advanced experience, based on the introduction of market maker system has to "Off Securities market "and" inter-bank bond market", "futures market", "property market", "foreign exchange market, "and many other markets, although the market maker system has many years of research and exploration, but the design of the system are not mature the actual effect is not obvious. The author discusses the development of market maker system in various markets separately in this part. Second, it is necessary to introduce market maker system to China's GEM. First, the author analyzes the significance of the GEM. GEM has demonstrated the three major functions, which are the development of a multi-level capital market system, promote the growth of innovative enterprises, the development needs of the times. Second, I briefly stated the process of ten years during which the Growth Enterprise Market of China was founding. Third, the author points out that still stocks are overvalued and differ seriously, price fluctuate intensely, risk of market manipulation and other issues was exist in the young China'GEM, the market maker system provide an effective way to solve these problems. Finally, the author continues to analyze how to break the bottleneck for introduction market maker system to China's security market. China has to face several major bottlenecks for the introduction of market maker system which are the concept, the environment, and the system. Only when a Breakthrough occurred in their fields, that the market maker system would really take root in China, and play its due role. In the environment, first, to achieve the full development of the market of the identity; Second, foster a number of financial intermediaries with a strong risk resistance capability and professionalism; Third, the realization of hardware with the world; Fourth, improve the level of broker's self-awareness and market supervision. We should gradually reduce the financial authorities of the securities industry and securities markets over the control mechanisms to improve margin trading and short practical feasibility of cultivating long-term investors such as institutional investors in the system.The author defines the necessity of introducing market maker to China's GEM through the discussion above, provides a direction for the development for future systems and policies designed. Give an affirmative answer in the issue of whether introduce the market maker system. |
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