Gem Study

Many countries established second board markets for very small companies, some of them are successful, but others have dismal record of failure. This paper hope to find the factors which contribute to the success of some and the demise of others by means of comparison of the major overseas second board markets' establishing method, market orientation, qualification standards for initial and continued listing, trading mechanism and supervision mechanism.The conclusions are as follows:1. Second board market should adopt independent establishing method, but according to our country's actual situation, maybe it is feasible that we adopt one exchange and two boards parallel method.2. The second board and main board should have their own market orientation, but it is better that there is proper competition between second board and main board when their target listing companies are the same to some extent.3. The listing requirements of multiple-tiers and multiple-choice and clear delisting condition contribute to the success of the second board markets.4. On the basis of order-driven system, we should research the possibility of introducing the quotation-driven system which specialized for trading the illiquid stocks.5. Strictly supervise the listing companies of second board markets, disclose the important information more frequently and profoundly, introduce the outside director system, establish the system of significant stockholders' prohibiting securities' sale, enhance the responsibility of the sponsors.