China's Securities Regulatory System

In December 1990, the two Securities Exchanges of Shanghai and Shenzhen were established. This is the symbol of the birth of the securities market in this country. After ten years efforts and struggle, China's securities market has made an incredibly great progress. During this process, what is quite different from western countries is, the regulatory authorities is not only the regulator and supervisor, but also the organizer and promoter of the market. Now China is in a critical period of strategic re-adjustment of the structure of the economy, where the securities market should meet the new needs of the economy, hi the meantime, if we look at the securities markets in the world, we can find that they are playing a more and more important role in the development of economy in respective countries. After the Asia financial crisis, the voice for stronger regulation by the government becomes louder and louder. China has already joined WTO formally and thus has to face the challenge of globalization of the world financial market. We are under a very heavy pressure.For all of these reasons, how the authorities regulate the market becomes the real focus of the society. Of course this is a very difficult issue. To deal with it, it is very important to establish a practical theoretical model of securities market regulating which is truly compatible to China's problems in practice.This dissertation analyzed the purposes of securities market regulating and the current regulatory system, figured out the possible measures to improve it, and thus tried to be beneficial to the construction of a workable regulatory system and the development of the securities market.There are four parts in this dissertation.Part one introduced the concept of securities market regulating and the history of concerning theories, analyzed the practicability of respective major theories. It proved that since the existence of the failure of market and the characteristics of securities, when the market can not properly deal with some economic problems by itself, it is necessary to replace part of the market with compulsory regulating.Part two considered the purposes and principles of regulating which were enacted by the International Organizations of Securities Regulatory Commissions and put forward the author's argument about the fundamental and specific purposes of China's regulating-fairness and efficiency are the ultimate purposes, while a proper price level, proper amount of corporation financing, correcting violating activities, promoting modem company system, protecting the interests of small investors, etc., are the specific targets of regulating during different periods of time.Part three analyzed the historical motivation and the contents of different models of securities regulating and supervising, and discussed the necessity of a centralized regulating model.Part four tried to sort out the mechanism and existing problems from the evolution of China's securities market regulatory system, then gave advice about how to improve the current regulatory system and how to regulate and develop China's securities market.China's securities market is still in its babyhood. Hope this dissertation is helpful to the development of the market and improvement of the regulatory system.