Analysis Of China’s GEM Delisting System

The original intention of building GEM, is providing a platform offeringfinancing resources for the start-up enterprise which have great potential, GEM is initself a marketplace of a survival of the fittest and high flow ability, while delistingsystem is the important guarantee to ensure GEM “entering or exiting” to the capitalmarket. After several twists and turns, the Shenzhen Stock Exchange issued "ShenzhenStock Exchange GEM Listing Rules"(2012revised edition), on April20,2012,which carried out in the same year out starting from May1, this indicating thatdelisting system is put into effect formally. We can see the new rules have already hadmade great progress with the aspects of scientific and implementation dynamics, butthere is some urgent problem for us to improve.This article research delisting system of our country, pointing out that there areproblems with the present stage of GEM delisting system and the causes affectingdelisting system implementation force, it employ other countries’ experience ofcarrying on delisting system, mainly from USA NASDAQ and Hong Kong GEMmarket. It carries out analysis on relevance problems of our country delisting systemestablishment, finally the author submitted some law suggestion covering how toimprove delisting system as well as how to ensure executing de listing system withsupporting measures of delisting system implementation.Chapter1has collated and stipulated the concept of delisting system firstly,analyzing characteristic of enterprise encountering delisting risk on capital market aswell as delisting system’s importance for capital market; then it expounded currentdelisting system situation of our country.Chapter2analyses the characteristics of NASDAQ, United Kingdom AIM andHong Kong GEM market with the aspects of delisting standards, delisting program, delisting treatment extent of authority partition, carried out a summary on these maturedelistingsystems’advantages.Chapter3analyses the cause affecting our country GEM delisting system. Onehand is that there is problem with itself, for instance, delisting system standarddefection, poor supporting mechanism after delisting, exit compensation unavailableand so on; The other hand is analytical priority, is to analyze why the localgovernment, enterprise as well as the investor does not accept delisting system, andwhat action each benefit subject takes in order to avoid delisting.Chapter4is the focus of the full text. It has brought forward some feasibleimprovement ideas specifically for the third chapter analytical causes, mainlyincluding the aspects as below: how to design more scientific delisting system, how toreinforce delisting responsibility investigating and compensation, how to cultivatemature and reason investment concept and how to decrease administrativeintervention.