Sino-us Gem System Study

The Growth Enterprises Market (GEM), as the name implies, refers to the market in which start-ups could get financing for further development. Early in 1998, Chen Siwei, vice chairman of NPC Standing Committee, on behalf of CNDCA (China Democratic National Construction Association), put forward a proposal, Accelerating the Development of China's Venture Capital in Reference to Foreign Experience, during the NPC and CPPCC sessions. Until August 22, 2007, "GEB (Growth Enterprises Board) Listing Rules" (Draft) was approved by the State Council, the launch of the GEB was before dawn. In September 2009, the first batch of 28 companies, strongly backed by related policies, got listed in the GEB. Around the world, a number of countries have ever launched the Growth Enterprise Market successively, many of them ended in failure. Among those successful ones, the U.S. NASDAQ market is the most prominent model which other countries rush to imitate. Therefore, this thesis compared the Chinese GEM system with the U.S. NASDAQ market, with the hope to explore the direction of the GEM system development in China.The thesis consists of five chapters. Chapter two contrasts IPO listing quotas of two markets and analyzes their social conditions of these differences. NASDAQ is a multi-level market with a comparatively lower listing threshold for an enterprise to raise funds from a countrywide or regional market. While China's GEM, as a constituent of the main board, has a higher listing threshold to safeguard investors' interest. The third chapter focuses on the difference of delisting systems in the woe countries. NASDAQ is an easy-in and hard-out market where most growth enterprises could get listed to raise funds, but delisting regulations are very strict. Therefore, an enterprise, more often than not, takes delisting as a strategy. China's GEB delisting mechanism, in order to make a full play of this market's "filter valve" in optimizing resources allotment, is as stringent as its listing mechanism.Chapter four contrasts NASDAQ and China's GEB in information disclosure rules. Supervision goes through the whole operation of a listed enterprise, and this chapter contrasts and analyzes information disclosure regulations from two governments. NASDAQ focuses on self-discipline along with adductive government supervision. China's GEB supervision stresses institution and a set of comprehensive regulations was formulated and issued to regulate listed growth enterprise.As a summary, chapter five puts forward, by comparing and contrasting, constructive ideas that combining China's specific national conditions with successful experience drawing from NASDAQ to improve China's GEB and make its role of allocating resources a full play.