What Are the Advantages of Capital Markets?

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 economic system.

Multilevel capital market

In the capital market, different investors and financiers have different sizes and main features, and there are differences in financial services in the capital market.

1. Motherboard market: The motherboard market is also referred to as the board market, which refers to the traditional

1.The structural characteristics of the U.S. capital market system:

The US capital market system has the largest scale, the most complex and reasonable system, and mainly includes three levels: the main board market.

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.

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, well-established, well-known large-scale enterprises. The company's sources should mainly come from the second and third board markets and meet specific conditions, such as company assets.

The Decision of the Central Committee of the Communist Party of China on Several Issues concerning the Perfection of the Socialist Market Economy System has made a major theoretical breakthrough in developing a multi-level capital market system. The "Decision" states: Vigorously develop capital and other factor markets. Actively promote the reform, opening up and stable development of the capital market, and expand direct financing. Establish a multi-level capital market system, improve the structure of the capital market, and enrich capital market products. Standardize and develop the main board market, and promote the construction of venture capital and GEM markets.

With the advent of the era of the knowledge economy, the way of corporate investment returns has changed dramatically. The main way for corporate investment returns is not shareholder dividends, but capital appreciation, and the benefits of capital appreciation exceed the dividend returns of shareholders. Because in the early stage of growth of high-tech enterprises, cash profits are not much, and the rate of capital appreciation is fast, which is determined by the rapid growth of their technological content. Capital appreciation has long been an important basis for measuring income in Western countries. Under Canadian tax law, once you become a resident of Canada, the appreciation of all assets (regardless of the world) is subject to Canadian capital gains tax.

To realize capital appreciation income, modern enterprises must have

The research group of the "Multi-level Capital Market Research" group of the Institute of Finance of the Chinese Academy of Social Sciences

Due to the important role of SMEs in economic growth and maintaining employment, especially driven by the information technology revolution, the importance of SMEs has become a global trend, and the construction of SME financing systems has become a national government and financial institution. Focus of service industry. As far as China is concerned, considering that the economy is still undergoing transformation, in addition to meeting the challenges of the information revolution,

The overall idea of developing an OTC market is to establish a modern electronic OTC market that is organically integrated with decentralization and concentration. This market is different from both the traditional OTC market and the exchange market. The traditional over-the-counter market is similar to individual, decentralized personal computers. Although problems in a single sub-market will not cause the collapse of the entire system, and each sub-market has its own characteristics, the efficiency of information transmission between sub-markets is extremely low. The exchange market as a main board is similar to the early computer-centric host network. Among them, the exchange is similar to the central computer. Listed companies, investors, and various intermediaries are all types of terminals connected to this main host. Central host. In this kind of system, although the information transfer is extremely fast, so is the transfer of risk. Because the central host has withstood all external shocks, the operation risk of the entire system is extremely high. Moreover, because the risk is ultimately borne by the regulatory authorities, it is likely to cause moral hazard to other participants in the market. In addition, in such a market, the types and entities of transactions are highly standardized and are not suitable for diversified SME financing.

Multilevel Capital Market Related Books

The development model of modern OTC markets is to maintain the low system risks and diversification of trading varieties and entities in the traditional OTC market, and to obtain the high-efficiency information transmission of the main board market. In other words, the decentralized OTC markets in different places are integrated into one, and "unified interconnection and decentralized market making" are implemented. This market is similar to the current Internet: there is no single central host, multiple central servers, and relatively independent hosts and sub-networks are interconnected through the standard TCP / IP protocol. If a single server fails, it can simply be isolated from the system while the entire network remains healthy. For such a decentralized but interconnected market, first of all, strict and uniform market operating rules and standards must be established within each market; secondly, the inter-field communication must be based on the independence and independence of individuals using modern information technology to achieve interconnection, full disclosure of information and shared. The basic characteristics of this system are that the responsibilities of the main players in the market are clear, the interconnected markets realize information sharing, standardized market makers implement self-discipline management and risk self-responsibility, and the focus of supervision is on the unification of rules and information disclosure.

General idea: Unified interconnection and decentralized market making The basic characteristic of a modern OTC market is necessarily "uniform interconnection and decentralized market making." "Unification" here refers to the unification of the basic rules, standards and procedures of market operation, including supervision rules and procedures, standards for listing and refinancing of enterprises at various levels, rules and procedures for transactions, and information disclosure of sponsoring brokers, Rules and procedures for market making, etc .; the second refers to the unity of registration and custody. "Interconnection" refers to the communication of information among sub-markets in accordance with unified rules. Decentralized market making includes two levels of meaning: first, the company and the sponsoring brokers are each other's counterparties, and they can freely match under unified rules. Enterprises can freely choose the sponsoring brokers, and the sponsoring brokers can also choose which companies to list; Investors and sponsoring brokers are counterparties to each other. Investors are free to choose listed companies for investment, and the transactions of listed companies are finally matched with the corresponding sponsoring brokers. This market has two key benefits:

(1) Conducive to the formation of an investment and financing system with transparent information, complete competition and decentralized risk. Such markets are highly transparent due to the unification of basic rules and the interconnection of information. In such a market, for companies, in order to obtain financing to develop themselves, they are willing and able to choose standardized and innovative hosting brokers. For hosting brokers, in order to attract investors and obtain long-term development benefits, They can and will inevitably choose companies with complete governance structures and promising business development. For investors, they can choose investment and transaction objects based on the performance of the enterprise and the credit quality of the sponsoring broker. Thus, the three-party free matching of enterprises, securities firms, and investors constitutes a fully competitive system. In such a system, all parties can get corresponding returns and bear corresponding risks. Market-wide risk is therefore highly diversified.

(2) Conducive to reducing moral hazard and improving supervision efficiency. In such a system, because there are unified rules and, more importantly, the risk is highly dispersed, the regulatory authority can completely avoid other market entities from passing on risks to themselves, thereby effectively overcoming the issue of moral hazard. For enterprises, if they violate the rules, they can be easily delisted; for the sponsoring brokerage company, because it is similar to a node in the entire Internet system, if they violate the rules, closing them will not affect the entire system; They said that their counterparties are brokers, which will also prompt them to face the risks they face, thereby giving investors full incentives to proactively monitor brokers. Therefore, the responsibility of the supervisory authority lies only in maintaining uniform rules and the interconnection of information, which can greatly improve the efficiency of supervision.

Specific arrangements rely on the agency share transfer market to build China's modern over-the-counter market, the purpose of which is to serve SMEs. Considering the existence of two key characteristics of SMEs: a life cycle and low information transparency, we believe that the following points should be noted in specific arrangements:

(1) The listing system is registered and has a refinancing function. Since it is built as a key link in the financing system of SMEs, the agency share transfer market must have financing and refinancing functions. As SMEs in different life cycles have different risks and information transparency, in order to ensure the disclosure of information, a registration system for sponsors to sponsor according to uniform standards should be implemented. Sponsors must not be sponsoring brokers. The compliance of the listing standards is determined by the sponsoring brokers according to the standards and relevant operating procedures, and the quality of the listed companies is the responsibility of the sponsor. The quality of information disclosure is the responsibility of the listed company, and the sponsors and sponsors supervise it. The listed company does not need to go through a long and tedious listing approval process, as long as it meets the standards and the relevant parties are willing to bear legal responsibility. Listed companies and sponsored brokers have a two-way choice. Investors can also choose which sponsored brokerage market to invest in, promoting the parties involved in the market to improve their integrity, cherish their credibility, and conduct healthy competition on the basis of integrity and rules. In this way, listed companies can greatly reduce the company's listing costs, and investors can also have rich and diversified options. For the market itself, it can effectively expand the depth of the market, and thus effectively suppress market speculation. In addition, the refinancing function is also essential. At present, the market only deals with delisted companies. These companies have two futures. One is to return to the main board, but so far there is no precedent. The second is self-destruction and liquidation. The reason these companies aim to return to the main board is that it is only possible to refinance after returning to the main board. If we really regard the agency share transfer market as a key part of the SME financing system to cultivate and develop, we should allow listed companies to have refinancing functions in this market. Capital markets without refinancing functions simply cannot Call it the market.

(2) The fully transferable nature of securities. At all stages of the life cycle of SMEs, successful companies must inevitably frequently acquire and merge failed companies. Moreover, in order to avoid risks, investors also need securities to have better liquidity. Therefore, the securities in this market should be fully transferable. Conceptually, "transfer" is different from "transaction", just like the difference between "listing" and "listing". The meaning of the word "transfer" in the agency share transfer market determines the undivided and fully transferable nature of the market. State-owned shares and legal person shares on the main board market have never been barred from transferring, but they cannot be traded on the market. It is obviously unreasonable that these shares cannot be transferred in the "transferable market". Unless you just want to be a dead market, from the perspective of constructing a new market, you can't continue the inherent shortcomings of the main board market. From the beginning, this market must have the same rights and shares, without splitting shares. All shares have the same right to enter the market. .

(3) The market is dominated by professional investors. The high risk of this market itself is destined to be a market for professional investors. Compared with the main board, its liquidity is low, its listing is not subject to strict approval procedures, the companies that can be listed are adequately supplied, the size and credibility of the company are relatively low, and refinancing is relatively free, and the market share price will be at a more reasonable level. The biggest advantage of this market for investors is that it has many varieties and low prices, but the risks are relatively high. General investors with a high degree of risk aversion and weak securities research capabilities are not suitable for investment here, but it is more suitable for professional investors with industry and industry background knowledge. They will have a deep understanding of the industry in which the listed company is located, as well as the principles and art of investment. They will also play a good role in promoting the quality and technical standards, management level and allocation of social capital resources of the listed companies. .

(4) The nature of the responsible entity of the sponsoring broker. The agency share transfer market cannot develop in the direction of centralized trading by the exchange, and must shift to a multi-agent direction. To this end, the sponsoring brokerage must be the subject of responsibility. As far as the listing and refinancing qualifications of the company are concerned, the securities firm as the responsible entity makes selections in accordance with the unified rules; as far as the transaction is concerned, the securities firm is also responsible for matching. In fact, if it is not a mandatory requirement made by the Securities Law, there is no need to go through the exchange to match up transactions. Although the qualification of a securities firm as such a responsible subject comes from the regulatory authority (such as the Securities Industry Association), its actual implementation is determined by the three parties, namely the enterprise, the investor and the securities firm, as equal civil liability subjects through mutual transaction agreements. This is entirely the result of free choice by all parties. The Securities Industry Association is only responsible for the qualification certification and annual inspection of motherboard securities companies. Sponsoring brokers that do not meet the requirements or are not recognized by other participants in the market may revoke their main board qualifications, and their listed companies may be transferred to other listed brokers in accordance with relevant rules.

(5) Supervision focuses on ensuring full disclosure of information. Compared with the main board, this market needs to substantially increase the disclosure standards of transactions that should be disclosed and related party transactions; implement a real-time information disclosure system to improve the efficiency and timeliness of information disclosure. Responsible persons who have major problems with information disclosure shall be severely qualified, administratively or criminally punished by the association, the Securities Regulatory Commission or the public security department. Sufficiently crack down on the major shareholders' violation of the interests of small shareholders, and fully protect the interests of small and medium investors. Therefore, the responsibility of the supervisory authority lies in the disclosure of information. Moreover, as long as the relevant rules are complied with, transactions between securities dealers, investors, and enterprises are completely the behavior of equal civil subjects, with risks and benefits at their own risk, which also allows the supervisory authority to focus on the disclosure of information.