Smes In China To Take Advantage Of The Gem Market Financing Risk Prevention Legal System Research

In recent years, SMEs (small and medium-sized enterprises) have became a huge driving force for socio-economic growth in China and occupy an important position in the national economic development of China. They play a great importance for the sustained and healthy development of Chinese economy. However, while the SMEs, especially technology-based and growing SMEs are rapidly developing, they are faced with the predicament of maintaining day-to-day operations and long-term development funds. The establishment of Chinese Growth Enterprise Market has opened up new avenues for SME financing. Some SMEs with high-tech, high growth but relatively weak financial strength can gain financial support and long-term development through listing on the GEM (growth enterprise market)However, according to the practical experience of the world's major countries in the GEM, as well as Chinese experience, the establishment of the Growth Enterprise Market for financing of SMEs is not able to once and for all. There are many risks while providing the means of financing for SMEs. Therefore, to analyze of the risks faced by SMEs through listing on the GEM Market and then putting forward the corresponding preventive measures have very important theoretical and practical significance. This article first systematic introduces the concepts, features and functions of the GEM, and then further positions the main serving body of the GEM market:high growth and high-tech SMEs. Then it introduces the concept and criteria for classifying of SMSs, detailed defines the high growth and high-tech SMEs and then discusses the difficulties encountered and the reasons for them of SMEs in China in the financing process. In the second part of this article, it introduces the legislative framework of the GEM and legal system of risk prevention in our country and some other most representative areas, trying to find the existing problems of legal system of risk prevention in China by reference to the world's most advanced GEM system. The third part of this article mainly specific analyzes the existing risks and problems of Growth Enterprise Market in China through the aspects of GEM itself, SMEs, intermediary agencies and regulatory body. In the fourth part, it detailed discussed the construction of system to guard against these risks, in order to ensure the health of GEM as well as the continuously financial support for SMEs.Through detailed classification and analysis of the risks in Chinese GEM market, this article argues that Chinese GEM market should position in a platform of mutually complementary with the main board market, partly competing and supporting for the financing of SMEs to reduce the own risk of GEM. A complete and sound legal system should be established to make the behavior a legal basis. Furthermore, a set of various GEM systems like selection system of listed companies, flexible trading system, strict information disclosure system, structured, scientific and efficient regulatory system and improved delisting system must be formulated to prevent risks for listed companies regulatory risks. At the same time, qualified intermediaries and rational investors should be cultivated to reduce the risk of participants in the Growth Enterprise Market.