Study On The Supervision System Of The NEEQ Market

Different from the OTC markets of developed countries, NEEQ Market has experienced a developing process with Chinese characteristics which undergoes hard exploration, and has become an important part of Chinese capital market. At present, NEEQ Market is flourishing and developing rapidly, showing its charm and prospect in the capital market. At the same time, all kinds of illegal activities made by market participants occurs frequently. Companies listed on NEEQ Market are unlisted public companies, which are mainly private enterprises, full of innovation and entrepreneurial characteristics. Compared with public companies, companies listed on NEEQ Market have lower information transparency, worse ability of corporate governance and more imperfect internal control system, that facilitating the major shareholders to seek private interests with the predominance in controlling rights. In addition, the shares of listed companies are transferred in public, with a large investor base, whose interest extremely vulnerable to be damaged. When it comes to the protection of investors’ interests, financial intermediaries play an important role in accommodation of fund, can be easily lured with improper benefits, and then produce documents with false information. If there is no supervision in the transfer of shares, it will breed insider trading, market manipulation and other illegal transactions. The current regulatory system as the basic guarantee for the efficient operation of market, remain has many problems unresolved. NEEQ Market supervision is more and more strict, and this has become an inevitable trend. In order to improve the system of supervision, regulators need to comb the train of thoughts and grasp the stages and characteristics of the market development.The value orientation of the NEEQ Market supervision system should be based on the principle of "equity priority, efficiency must be given consideration ". Supervision system must ensure that the participants, namely the securities issuers, investors, and intermediaries, have equal opportunities to participate in the market activity, and on this basis, try to erase the inefficiency caused by market failure. Regulatory purposes shall be based on investor protection as the basic goal. In order to maintain the efficient operation of market mechanism, improving the efficiency of the market should be set as the intermediate goal, and guarding against systemic risk should be set as the ultimate goal.NEEQ Market supervision shall be based on the basic purpose of protection of the rights and interests of investors as the starting point, through the supervision system design, making the power and responsibility between the regulatory divisions clear, and improving regulatory efficiency through cooperation. Problems existing in the current legal system of supervision is that the authority of administrative supervision is too large, and the responsibility of industry self-regulation is mostly borne by the NEEQ-company, which led to the coexistence of supervision vacancy, offside situation. NEEQ-company’s daily supervision is based on the continuous regulation of securities companies of listed company, there are broker’s poor supervision exists. Meanwhile, the lack of innovation in supervision means brought low level of regulatory efficiency. The legal and regulatory system of U.S. OTC market bring us the enlightenment includes the following points:emphasize the importance of improving the legal system; pay attention to the maturity of industry self-regulation; pay attention to the cooperation of industry self-regulatory and administrative supervision; make the boundaries of supervision and the market clear; introduction of voluntary information disclosure standards in different market level for invigorate the market by increasing autonomy.The legitimacy of the NEEQ Market supervision originates from market failure and the demand of risk control, the government used the basic foundation of administrative intervention and supervision of self-discipline organization is the law rather than the "power". Under the background of the rule of law, the scope of supervision and the rights and obligations of the participants in the market are determined by the legal system design. The related laws and rules should be perfected, thus there is laws for the supervision to abide by. The legal system construction of market supervision should first clear the basic ideas, and then fill the contents of the framework. As for the thought of supervision, regulators should recognize the market development stage and follow the basic rules of the establishment of the supervision system and conform to the trend of the development of capital market. In the construction of the legal system of supervision, regulators should adhere to the ’"Disclosure, Equal, and Fairness" & the "three public" principles and design the supervision system based on supervision goal. On the concrete measures of perfecting the legal system of supervision, the boundary of the administrative supervision and self- discipline supervision should be clear, and on this basis, seeking the collaboration mechanism of the industry self-discipline supervision with the NEEQ-company self-discipline management. Information disclosure rules can be improved through the construction of multi-level information disclosure system. In view of the important role of brokerage in market activities, the system should increase the legal liability of the sponsor and the market maker to guide their activities to fulfill the relevant obligations more standardized. In addition, regulators should pay attention to the risk prompt and the rights protection for investors, and increase the input of resources to enhance the service of education base. On the means of supervision, regulators should further promote the adoption of electronic supervision, and promote the use of big data to improve regulatory efficiency.