Research On Risks And Risk Prevention Strategies For The New Third Board Market

As the main part of Chinese over-the-counter?OTC?market,the market scale of the“New Third Board”expanded rapidly with a quick-rising number of listed companies after the expansion in 2013,and has become an important part of China's multi-level capital market.The National Equities Exchange and Quotations?NEEQ?was set up in Sept20^th,2012,marking the“New Third Board”was formally established.The NEEQ had also changed the“New Third Board”from a local trading platform to a nationwide trading platform.However,with the vigorous development of the“New Third Board”market,risks are also followed.Various kind of problems in the financial and corporate governance of the listed companies have not been solved through listing.The“New Third Board”market needs to establish a series of trading and regulatory system to guard against different risks in the primary and secondary markets.This thesis studies the risks and coping strategies of the“New Third Board”market.On the basis of summarizing relevant concepts of venture capital theory,investor protection theory and risk management theory,this thesis will first analyse the current situation of the development of the“New Third Board”market in China,that is,the rising market capacity,the widespread distribution of enterprises and industries,the centralized geographical distribution,and the market maker system.At the same time,the“New Third Board”market has the following problems:low liquidity,lack of market activity,market making system need to be improved and tax avoidance behavior is rampant.Then,this thesis analyses the five major risks faced by the“New Third Board”market in China,those are:systemic risks;risks of the listed companies,which including business risks,ownership structure and governance risks,and information disclosure risks;risks of market making system,which including inherent risks of market maker system,irregularities risks of market maker;personal investor risks,which are investment risks,price manipulation risks;supervision and system construction risks include the risks of insufficient supervision level and the risks of imperfect transition mechanism.Finally,the thesis puts forward some suggestions on risk prevention in the“New Third Board”market,those which are,the listed companies should strengthen themselves'risk management,the intermediaries should improve their service quality,the market should strengthen market construction,and regulators should improve supervision system,so as to promote effective risk prevention in the“New Third Board”market,and then,provide strong financial support for the development of emerging industries and small and medium enterprises.