The Demutualization Of The Stock Exchanges In China

From the 1990s, there raised a wave of stock exchanges demutualization around the world. To adapt to the economic globalization and the tougher and tougher market competition, the world famous stock exchanges have transferred their governance structure from membership system to corporate system. At the same time, "the small and medium-sized enterprise stock transfer center" in China and other regional or localized stock trade platforms comply actively with this trend, which have transferred their governance structures to corporate system or at the beginning chose corporate system to start and develop their enterprises. In addition, with the modification advance of the Securities Act, together with the inspection on the draft of Securities Act, the excess intervenes of our government to capital market would be reduced less and less, and all the systems of capital market in our country would be sounder and better. Thus, the status of stock exchanges in our country, which is as an independent economic entity, will be strengthened a lot; not only do they face tougher market competition and also have more and more development opportunities. Under such international and domestic background, the issue of demutualization for Shanghai and Shenzhen Stock Exchanges is involved in both their survival and the future development.This paper expounds the demutualization of stock exchanges in our country mainly from three parts:The first part summarized the current characteristics of governance structure of Shanghai and Shenzhen Stock Exchanges, together with the problems which come from those characteristics. The stock exchanges in our countries are with heavy administrative color. However, the excessive government intervenes would hinder the function and autonomy power of stock exchanges. What's more, the problem of which the property of the stock exchanges in our country belongs to is not clear, which would lead to the chaos of the rights and responsibilities about supervision in stock exchanges.The second part of the paper firstly analyzed the market demand of the stock exchanges demutualization from the international and domestic background. In the current capital market of its large scale, the competition stress for Shanghai and Shenzhen Stock Exchanges is not only from the competition with foreign stock exchanges but also from the domestic exchanges of differed-level capital market. Whether the international or domestic trend of demutualization of those stock exchanges will exert influence on the future road of Shanghai and Shenzhen Stock Exchanges. Besides, with the effect to stock exchanges from the modification of the Securities Act. the paper discussed the possibilities for the demutualization of Shanghai and Shenzhen Stock Exchanges by analyzing that law reestablishes or changes the old systems. Finally, comparing membership system with corporate system the paper illustrated the reasons why Shanghai and Shenzhen Stock Exchanges should choose the corporate system instead of membership one.The last part mainly analyzes and illustrates the issue around how the stock exchanges in our country implements the demutualization. The changes of ownership structure of "the small and medium-sized enterprise stock transfer center" in China and other countries' models are firstly compared by this paper, which draws a conclusion that Shanghai and Shenzhen Stock Exchanges should choose what kind of approach to transfer their ownership structure. Secondly, the paper proposed some appropriate advices for the intern governance structure of stock exchanges on their demutualization road. At last, the solutions for stock exchanges facing the future challenges after their demutualization are also discussed by the paper.