Research On The Influence That Short-selling Restrictions Effects On The Behavior Of Institutional Investors

The contents of this paper focus on the influence that the short-selling restriction exerts on the behavior of institutional investors. This article made summary exposition on the history evolution of short selling restriction, analyzes policy and effects of short-selling restriction the financial crisis in various countries and regions in this financial crisis. on the basis of above, the development trend of short-selling restrictions are predicted; Then from the perspective of behavioral finance through theory model I explain the formation mechanism and its application of the positive feedback trading behavior of institutional investors introduce the short selling restrictions on the basis of the conditions, applying the principles of limited arbitrage to analyse the influence that the short-selling restriction exerts on the behavior of institutional investors.;Then by establishing a positive feedback model I made empirical studies on investors behaviour changes when there is short-selling restriction and when there isn't short-selling restriction, combined with specific features of the securities market the result was analysed; synthesizing the above,the final conclusion were formed,and relevant policy recommendations were made.The results of this study indicate that institutional investors short-selling restrictions will lead to limited arbitrage, and will restrain investment behavior of positive feedback when the market go down but the China's securities market is mainly affected by the policy, and securities margin trading system is not yet perfect, so the influence the short-selling restrictions exerts on the positive feedback trading behavior is not obvious. In order to play the role of short-selling on the basis of maintaining the healthy development of China's securities market, market supervision should be strengthen the information disclosure system should be improved.we should make great effort to cultivate various types of institutional investors, advocate rational investment and promote the construction of margin trading system while paying attention to risk prevention.