Study On The Legal System Of Information Disclosure Of Chinese Growth Market

The Growth Enterprise Market (GEM, the second-board market) provides financing channels for small and medium-sized enterprises and high-tech enterprises, which are of high growth and high technology content, and fail to list on the main board with high criterion. The GEM is a high risk market due to lower criterion and the uncertainty of the future development. Information disclosure system, which is the core of securities market system, plays important roles in risk prevention and protect the interest of investors. Information disclosure system are codes of conduct and guidelines for information revealer to announce the information of security to investors and the public in the issuance, listing and transaction processes of securities. Given the high risk of GEM, compared to the main board markets information disclosure of the GEM expresses the special some properties, for example, emphasizing on the disclosure of non-financial information, tightening up its supervision, more frequently, and stressing the reveals of risk and the responsibility of intermediaries. Due to the asymmetry of information among the market players of the GEM, GEM information disclosure system, especially desires for fairness, efficiency and safety in order to ensure the healthy development of the GEM.In the paper, three typical markets, viz, Hong Kong’s Growth Enterprise Market, National Association of Securities Dealers Automated Quotations (NASDAQ) and Alternative investment Market (AIM) are analyzed and compare their legal system of information disclosure, To develop the information disclosure system of Chinese GEM, the management mode of Hong Kong’s Growth Enterprise Market, the well-developed civil liability system of NASDAQ, and the lifetime sponsor system of AIM are used for reference. The legal system of the information disclosure of China’s Growth Enterprise Market have gained great achievements, including, establishing the legal system of the information disclosure of GEM, providing the legal responsibility for the violation of the information disclosure obligation, and formulating the supervisory and managerial functions of Securities and Futures Commission. But some problems remain, for example, lack of centralization in the legal rule, lighter legal responsibility, imperfect litigation system, shorter continuous supervision period of sponsors and lack of their civil liability, exerting insufficiently the function of market self-discipline organization.Therefore, to promote the healthy development of the GEM, information disclosure system needs to be further developed and improved. Taking the current situation of the information disclosure of China’s Growth Enterprise Market as a starting point, summary the information disclosure rules specifically to the GEM, and increase punishment for illegal activities to improve the legal system of information disclosure of the GEM; improve the legal liability system of the GEM information disclosure, especially civil liability; prolonged the continuous supervision period of sponsors and fulfill their duties; social supervision and self-discipline function of listed companies should play active roles and while government strengths supervision; develop institutional investors and improve investor structure; improve the information disclosure system of China’s Growth Enterprise Market by illegal system, civil liability system, sponsor system, supervision system, and investor structure.