Case Study Of Compulsorily Delisting Compensation System About Small And Medium-sized Investors In China Growth Enterprise Market

The GEM(growth enterprise market)is an indispensable part of our country’s securities market.It was formally established in October 2009,and it’s a financing platform of small and medium-sized enterprise that can’t listed on the main board.GEM have a history of morethan seven years now.At February 3rd 2017,China’s GEM has 590 companies listed,issued capital is 265.9 billion yuan,raised a total of about 5 trillion yuan of funds.GEM was established more than seven years seemingly has developed rapidly,but it have a lot of problems.The enterprise in GEM usually have small size,The amount of shares is low,share prices is manipulated easily and the profits have greater volatility.Besides the initial premium and executives cash are occurring frequently.In this case,few companies have been forced out of the market.This makes us have to think about the system of the GEM.At present,our country is under the background of registration system.The improvement of compulsorily delisted become one of the basis of the running registration system.For a good stock market,delisting is no less important than listing.As for the overseas mature capital market GEM delisting system,in order to control risk and protect investors,has established a relatively perfect system of delisting.In our country,however,is showing a slight shortage of investors,in particular the small and medium-sized investors,this is the obstacle of the healthy development of the GEM.In 2014,the most stringent delisting institution put the compulsorily delisting problem into forefront.Small and medium-sized investors’ natural weak position make their rights violated easily,because compulsorily delisting can restrict shareholder of exchange and affect the price of the stock,so the compensation system become more and more important.This paper adopts the way of case analysis,mainly introduced the first be Compulsorily delisted company in GEM--Dandong Xintai Electric.Firstly,introducing the delisting system.Secondly,analyzing the motivation of financial fraud,investment’s philosophy of small and medium-sized investors,the consequences of irregularities,after that concluded the problems about compulsorily delisting compensation system.Finally from four main subject,put forward the proposal to consummating compensation system.The lack of compensation system is one of the reasons of our securities market slump.Rights can not be protected,so the investors lose confidence,it is imperative to build the compensation system.Due to the domestic research results related to the GEM compensation system and relevant cases not a lot,the papers in the compensation system,especially in the first compensation fund and the concrete design of compensation fund still need further perfect.