System Of China GEM Delisting

The Growth Enterprise Market is designed for those small and medium-sized, emerging companies which can not be listed on the main board. It provides financial channels for them in the security market. The GEM is an important supplement of the main board and it plays an important role in capital market. The GEM delisting system aims at those already listed companies which can not fulfill the requirements of the GEM and actively quit the market or being forced to. The GEM market has an enormous power of fund raising for those small and medium-sized enterprises, especially those high-tech companies.On October23,2009, the GEM opened its market in Shenzhen Stock Exchange.However, since then, the delisting system has been reprimanded. In addition to the problems already existed in GEM system, there are quite a lot of issues ready to be resolved in that market. For the delisting system only, the Shenzhen Stock Exchange has constantly promulgated series of programs in order to improve the GEM delisting system, such as the Shenzhen Stock Exchange GEM Stock Listing Rules (amended in2012). The new rules pushes up the standard for delisting, adding rules regulating the consolidation period and companies withdrawing the orientation. Relatively speaking, the new amended rules was a big progress. Nevertheless, after detailed extermination, it leaves big rooms for those bad companies to delist, which severely affect the healthy development the the GEM and establishes a bad model for the whole financial market.Some successful GEMs in the foreign countries include United States NASDAQ, Canada’s TSX Venture Exchange, London Stock Exchange AIM market, etc. A thorough study of the those markets and the cause of failure of the German Neuer Market can make the Chinese GEM delisting system even better. Of course, the primary concern of studying the delisting system, or even the whole financial market, is to protect the interests of the investors, especially those small and medium sized investors. The lack of market regulation, the strong interference of the government actions would cause the qualities of those listed companies are not at the same level, high risks for the investors, and lack of protections for their interests, and eventually, destroys their confidence in the whole market. It is a big challenge for Chinese financial market to find meaningful ways to protect the interests of those small and medium sized investors.