The Research Of The Institutional Investors’ Trading Behaviors On The Stock Market

China’s stock market started from a market gathered by individual investors. For many years, the structure of monotony market participants has been considered as one of the important reason for the volatility of China’s A-share market. In order to change this situation, "Interim Measures for the Administration of Securities & Investment Fund’ issued by China’s Securities Regulatory Commission on 14 November 1997, is the policy guide for the development of securities investment fund and provides the market standard for the development of its scale."Qualified foreign stitutional investors (QFII) Provisional Measures on Administration of domestic securities investment" was also published on 8 November 2002 and The Swiss Bank became the first qualified OFII on 9 July 2003. Since then, domestic A-share market opened to QFII. In October 2004, China CSRC and China CIRC jointly published the notice that insurance funds were allowed to enter capital market and invest in A-share market. The new policy clearly defined that insurance institution, as the qualified market participant, can invest in Shanghai and Shenzhen A-share market, and participate fair and orderly purchasing new stocks for IPO and secondary market daily transaction with trading all stocks in A-share market except for ST and PT stocks, company convertible bonds and other financial products in line with the regulations of CSRC and CIRC. With the supporting from NDRC, CSRC, CBRC and CIRC, China’s institution investors have the opportunity of sustainable development with the significant improvement for their structures, which makes the domestic stock market being mature.With the increasing of the proportion of institutional investors in the stock market investors, institutional investors have more and more large influence on domestic stock market volatility. However, domestic academia holds the different views. One view is that the current A-share market has the obvious regulation defects; meanwhile the target companies don’t have good performance and there are rare listed companies with good qualities to invest for the long term. In that case, institutional investors can get profit only from band operation which causes the sharp fluctuations in the market indirectly. Another holds the opposite view that the sustainable development of institutional investors contributes to the long-term stability of the stock market.The whole article includes total of five parts. The first part introduces the background and significance for this study and induces the study results both here and aboard; the second part elaborates the trait for institutional investors and their development in China; the third part focuses on the theoretical basis of the influence of institutional investors in the stock market; the forth part analyzes the positive impact and negative impact on China’s stock market by institutional investors; the last part put forward the suggestions and countermeasures, mainly on avoiding and reducing the negative impact from institutional investors on domestic stock market.