What Does an Equity Trader Do?

The regional equity trading market (hereinafter referred to as the "regional equity market") is a private equity market that provides companies in specific regions with the transfer of equity and bonds and financing services. It is an important part of China's multi-tiered capital market and a multi-tiered China An essential part of capital market construction. It has a positive effect on promoting the equity trading and financing of enterprises, especially small and micro enterprises, encouraging technological innovation and activating private capital, and strengthening support for weak links in the real economy.

Regional equity trading market

At present, China's capital market is divided into: the exchange market (main board, small and medium-sized board, GEM) and the national SME share system (new third board, regional equity market <commonly known as the four board market).

In the capital market, different investors and financiers have different sizes and main characteristics, and there are different demands for financial services in the capital market. The diversified needs of investors and financiers for investment and financing financial services determine that the capital market should be a multi-level market system. In addition, due to the strong inherent investment and financing needs in economic life, it is extremely easy to generate illegal securities issuance and trading activities. This multi-level capital market can hierarchically manage different types of investors with different risk characteristics and investors with different risk preferences to meet the financial needs of investors and financiers of different natures, and maximize market efficiency and Risk control capabilities.

(1) Conducive to meeting the multi-level requirements of both supply and demand of funds in the capital market

From the perspective of the fund supplier, investors also have different levels due to different risk appetites. Risk enthusiasts are willing to invest in high-risk, high-return stocks; risk-neutral people choose to buy stocks with moderate risks and the highest expected returns; risk-averse people may buy government bonds. However, China has only a single level

1. Establish a main board market centered on the Shenzhen-Shanghai Stock Exchange

Positioning the existing Shanghai and Shenzhen markets as the "boutique market" of China's securities market. As this market has a long history of development and good maturity, it can combine the entry of high-quality companies from the second and third board markets and the existing bad Withdrawal of the company (can be delisted, you can also turn to the second and third board for trading), and gradually establish China's securities boutique market. This market is mainly for large-scale and well-known mature and large enterprises. The company's sources should mainly come from the second and third board markets and meet certain conditions, such as the company's asset-liability ratio, company size, profitability indicators, and growth. It is also possible to re-finance additional shares in the main board market, but companies that do not meet these targets cannot be refinanced through the main board market, and in particular cannot circle money through equity refinancing. Quality, reducing risk in this market.

2. Establish a secondary market with small and medium-sized technology startups as the core

At present, there are three typical models of the international GEM market: a parallel model of two boards, that is, a second board is set up in the existing stock exchange to supplement the main board and operate together with the main board, the two have a common Organization management system and trading system, even the same regulatory standards, the only difference is the level of listing standards, there is no relationship between the main board and the second board. A second-board upgrade, that is, to set up an independent trading market for small and medium-sized enterprises in the existing stock exchange, with low listing standards. Listed companies must have sound accounting systems and accounting, legal, brokerage consultants and brokers. There are no other restrictive standards other than sponsorship. The relationship between the main board and the second board is a promotion relationship from low to high. Independent model, that is, the second board market itself is an independent securities trading system, with an independent organizational management system, a quotation trading system and a regulatory system. The threshold for listing is low and it can provide listing conditions for emerging high-tech enterprises to the maximum extent.

3. Develop OTC market and promote the construction of regional trading market with focus and selection

The establishment of China's three-board market system should adopt a "slice-by-block" model, with both a centralized and over-the-counter market and a regional market for equity and property rights. The specific ideas are as follows: First, learn from the experience of developed countries and develop OTC markets. According to the experience of developed countries, it is feasible for China to develop OTC markets and realize regional networking operations, centralized quotation, decentralized transactions, and unified accounting. Second, while accelerating the development of OTC markets, regional equity trading centers should be actively regulated. China has formed local equity trading markets in Tianjin, Zhejiang, Zibo, Guangzhou, Shanghai, Wuhan, Shenyang and other cities, which have publicly listed corporate equity, but most of these markets have been officially or informally approved by local governments. It is easy to be controlled and cut by local administrative forces, which makes it difficult for financial supervision. The central government should standardize and legalize the spontaneous local equity transactions in recent years, and open up a new financing channel for the healthy development of China's SMEs. Third, in order to solve the property rights transaction and transfer of high-tech enterprises, the local property rights trading market should be actively and steadily developed. Based on China's national conditions, the local technology and property rights trading market should take into account the general needs of high-tech, new technologies, and moderately adaptable technologies, and become a universally applicable SME property rights trading market. It can even be built into a special counter in mature conditions Market, thus forming a multi-level capital market.

In August 2012, the CSRC issued the "Guiding Opinions on Regulating Securities Companies to Participate in Regional Equity Trading Markets", at which time securities companies will enter the stage of regional equity markets, and contribute to the tomorrow of China's regional equity trading market!