The Impact Of Registration Reform On The Stock Market

IPO system is one of the most important system in securities market. Andreformation in this system also has a profound impact on the secondary market. In thisarticle, we discuss the difference between approving system and registration system inthe process and conditions of IPO by comparing USA, Japan and other countries toChina at first. Secondly, based on the influence of every reformation in IPO, weanalyze how the registration system and its supporting system work with each other;besides this, we research how the registration system impact on the secondary market.Finally, I draw the following conclusions: First, under the registration system, theinformation disclosure mechanism will enable the listed companies to operate in amore standard way, therefore the risk of investor will be reduced and get morerevenues, all of this will attract more capital into the securities market and keep thestock index in an excellent position for a long time. Apart from this, the registrationsystem reform make the process of pricing the new listed company’s share morereasonable and transparent, meantime lower the yield of listed shares on the first day.Thus the phenomenon of investor blindly putting their capital into new listed sharewill decrease, so as to the bad impact on the secondary market. It plays an importantrole in stabilizing the market for a long time. Thirdly, whether the registration systemimpact on the secondary market in a good way or not is depend on the stock supply.At the same time, the implementation of the registration system will lead to investorsprefer blue chips instead of restructuring and the subject shares.After all, there are two suggestions. One hand is investors should try to avoidinvesting in junk stocks and concept stocks blindly. Another hand is the regulatorsshould supply more education for investor to enhance their skill of investment, at themeantime, they should reduce market interventions, regulate the behavior of thesecurities agency, perfect the delisting system and three new board markets.