Research On The Effect Of Market-Making System In NEEQ

National Equities Exchange and Quotations(NEEQ)is an important part of multi-level capital market system in our country.When NEEQ established initially,negotiating transfer was the only way to trade,which led to series of problems,such as small market trading volume,the short of stock liquidity and the poor stability of stock prices.On August 25,2014,NEEQ officially implemented market-making system,in order to alleviate or solve these problems.Up to December 30,2016,there are 10,163 listed enterprises in NEEQ,including 1,654 enterprises with market-making system,and 8,509 enterprises with the "negotiating transfer".Besides,market-making system has been implemented for two years in NEEQ.This paper studied whether market-makers system has positive influence in the market liquidity and stability,by comparing the market performance of the listed companies after the introduction of market-making system.First of all,we choose 22 listed companies which is the first ones to change trading system as research objects,and studied whether the market-making system has the impact on stock liquidity and stock price stability.Based on the double difference model(DID)model,we studied from two dimensions.On the one hand,we analyzed the stock liquidity and stock price stability between enterprises with two different trading systems under the same point.On the other hand,we compared the stock liquidity and stock price stability between before and after changing the trade system on the same company.The results showed that market-making system can indeed improve the liquidity and stability of the stock.We found that the more the market makers,the better the liquidity of the stock,after the empirical analysis between the numbers of market makers and the liquidity of market.Secondly,taking 430074.OC as an typical example,we analyzed the stock liquidity and stock price stability before and after changing the trade system,the results further confirmed market-making system played a positive role on the market liquidity and stability.At the end of the paper,learning from the United States OTCBB market and Taiwan Emerging Stock market'trading systems,and combining the above empirical analysis and case analysis,we try to put forward some suggestions for NEEQ.