Sponsor "Credit Supervision" And IPO Performance

Since China implemented the sponsor regime, sponsor peccant phenomena have oftenoccurred. They carried "glamorous packaging", concealment and misrepresentation of materialinformation on the issue of corporate, Undermined investor confidence of sponsors, Seriouslyaffected the healthy development of China’s securities market, so China Securities RegulatoryCommission (CSRC)take a series of regulatory measures against illegal sponsor.This study has three main content: First, explore weather the CSRC penalties fornon-compliance sponsor are effective; Second is to further Probe what type of the Commission’sregulation is more obviously effective; Third, analyses weather the Commission’s regulatorymeasures would affect sponsors. We discuss these three aspects from three levels: the marketreaction of Punishment information; the market share after the punishment and IPO underpricing.In this paper, taking the sponsors and sponsor representatives that are punished by CSRCfrom2004to2012as sample. We conduct an empirical study on the implementation effect ofsponsor regime from the regulatory agency "credit monitoring" perspective. The results show thatin a period of time before and after the announcement of punishment information, stock prices ofthose companies that are sponsored by illegal sponsors prior to the announcement will do negativemovement; The future market share of sponsor where illegal sponsor and sponsor representativesare belongs to declined after the punishment; Its subsequent IPO underpricing will also be lower.So the CSRC penalty notice is information content. A further study found penalty effect are moreobvious if the punishments on illegal sponsors are heavier and involve more regulatory objects.The analysis and conclusions of this paper enrich the study aboutregulators "credit supervision", make up the defect in the research field of the efficiency ofsponsor "credit monitoring" under the background of China sponsor regime.