The Legal Prevention Of Gem Risk In China

On October 23,2009, the Growth Enterprise Market (hereinafter referred to as GEM) was set up in Shenzhen Stock Exchange, which has provided a solution to the financing problems for the SMEs, especially the high-tech, high-growth SMEs. Since the GEM is a high risk stock market, it is necessary to improve the GEM risk prevention system, so as to provide better financial support to the SMEs and protect the rights of the investors. On the basis of the theories and the facts in the GEM in China, the paper has a comparative analysis of China's GEM risk prevention system and the NASDAQ market system, and then tries to find out the problems in the legal prevention system of the GEM risk in China, based on which some advice is offered. The main contents of the paper are as follows:The first part centers on the basic theories of legal prevention of the GEM risk. It.briefly introduces the concept, the risk characteristics and the risk types of the GEM and the main risks the GEM in China are confronting. Then it comes to the necessity of the legal prevention of the GEM risk.The second part makes a comparative analysis of the GEM in China and the US NASDAQ Stock Market in the aspects of market liquidity legal prevention of risk and the risk prevention of listed companies, through which the paper will find out how a GEM has prevented the risks successfully and which risk prevention systems are worth learning, and finally, some advice will be offered.Through the foregoing analysis, the third part mainly focuses on the deficiencies in the legal prevention system of the GEM risk in China, including the problems concerning administrative organization of listed companies, information disclosure system, monitoring system and sponsorship system.The last part will offer some advice concerning the problems concerning administrative organization, information disclosure system, monitoring system and sponsorship system of the listed companies, and then analyze the feasibility of and obstacles of introducing market-maker system to the GEM in China, through which some legal advice will be provided. Finally the paper will construe the delisting scheme of the GEM in China and the reasons fordirect delisting, and then put forward some legal advice on the direct delisting of the GEM in China.