The Research Of Current Situation And Development Of Chinese OTC Market

"12th Five Year Plan" has clearly pointed out the need to speed up theconstruction of multi-level of the capital market system and to improvethe proportion of direct financing. At present, China’s multi-level capitalmarket system is constituted by the main board market (Shanghai StockExchange, Shenzhen Stock Exchange and the SME board), GEM (theShenzhen Stock Exchange) and OTC markets (Beijing three new board,the SEE，Shanghai Equity Exchange, and other regional equity Hostingtrading center). As the basis of a multi-level capital market, the OTCmarket is of great significance on helping small and micro enterprises tofinance and standardize. This test not only compared the developments ofseveral major domestic and international OTC markets, analyzed thecurrent situation of the representatives of the OTC markets-Shanghai Equity Trading Center (hereinafter referred to as SEE), but also offeredproposals to the development of SEE.This paper is divided into six parts. The first part is an overview of themain features introduced several representative overseas OTC market andthe significance of the two representatives of the domestic OTC market;second part analyzes the platform mechanism and management system ofSEE; the third part is the analyze of current situation of the listedcompanies in SEE, selected several representative listed companies totrack and research, through these cases to understand the change of thesecompanies entering the OTC market; the fourth part summed up listedcompanies’financing and transactions; the fifth part gave the suggestionsand discussions of the development direction of SEE, the sixth part is thesummary of the text.So far the most successful OTC market is the US OTC market, especiallyNASDAQ, even considered as the major force behind the United "SiliconValley magic”, its experience and mechanisms worth learning. But look atthe OTC market at home and abroad, whether it is the U.S. OTCBB, PinkSheets, the UK’s AIM market, Taiwan’s emerging markets, or domestic"new three board" on the stock exchange, the trades are not active andfinancing functions are not strong compared with the mainboard.Platform mechanism and management system of SEE is primarily inherited from United States, because it was market-oriented operated atthe very beginning, so in many ways it reflects the obvious differentstyles from three new board in Beijing. Although only established in2012,a lot of pioneering works such as the design of”one market, two boards"and private debt, M&A platform launch are gradually being recognizedby the market. Overall, its business scales and profitability of listedcompanies are weaker than the ones on three new board, but its financingcapacity is currently ranked first in Chinese OTC market.By tracking and survey of listed companies, I found that there existed notonly “star companies” which achieved leapfrog development by enteringthe OTC market, but also average companies received limited attention.Overall, although this is an emerging market, it is a relatively rationalmarket, it is impossible to create fortunes virtually overnight like on theMain Board and GEM, it is also impossible to accumulate wealth andBrand Influence in one step.After all, our country’s OTC market was still too young, the battle tosurvive for the good companies just started. Whether the market willboom and which companies will finally become great companies stillneed time to answer. But it is certain that the last winner of all themarkets will have paid great pains, adhered to the strategic and forwardsolidly in that market. To this purpose, SEE has a lot of work to do such as updating the process of listing, improve the constructions ofmanagement systems and platform.