Research On The Market Maker System Of The New Third Board Market

The market maker system originated in the U.S.NASDAQ market,and has been used by most capital market in the world now,especially the GEM market and the OTC market.As a trading system,the market maker system has the functions of enhancing market liquidity,maintaining market stability,price discovery and so on.As a theoretical system,the market maker system is mainly composed of trading patterns election,quotation rules,rights and obligations,inventory management,access and exit mechanism,supervision mechanism and so on.The market maker system has been diversification and personalized by the different countries according to the goal of the irrespective capital market needs and the actual situation.NASDAQ is the most typical and perfect,and is a model for the market maker system.The market maker system is a major innovation in the new third board market carried out on August 25,2014.Over the past year,the new third board market has developed in terms of market size,liquidity,financing capacity.The market maker system has played a significant role in promoting the development of these areas.But there are still many problems in the new third board,mainly reflected in that quality of enterprises is low,capsize is small,market liquidity is low,competition is not adequate and so on.The market maker system of new third board also appeared various problems.Through quantitative and comparative analysis,we think that the models of profit and inventory acquisition are not market-oriented enough,the admittance of market maker is narrow,the market maker is monopoly strongly,regulatory on the market making firms is loose and the means of supervision is lack in the new third board.The reform objective of the market maker system of the new third board should be the mixed market maker system in long-term because of the function of market and the characteristics of trading and investors.But the new third board does not have the market base to implement the mixed market maker system temporarily for the number of shares,equity dispersion,information disclosure and other aspects.Therefore,the new third board should improve the current market maker system firstly.So we propose the following policy recommendations to improve the market maker system of the new third board recently: to increase the quantity of market makers,to optimize the access to inventory stock with the market-oriented approach,to open the trading between the market makers each other,to expand investment range appropriately,and to strengthen and improve the supervision to the market makers.