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SZSE: GEM to Introduce Market Maker System
To maintain the principles of openness, equitability and fairness, to take information disclosure as a basis, and to guarantee an effective regulatory frame are the basic rules must be followed by the soon-to-be-launched growth enterprise market (GEM) to realize its goal of regulating listed companies, an official with the Market Management Department of Shenzhen Stock Exchange (SZSE) said recently at the Forum on the Development of Hi-tech Industry and the Capital Market.
The official said information disclosure is the key to the regulation of the GEM. Listed companies will not only be required to add quarter report to reduce the proliferation of internal information, but also to ensure the timeliness, accuracy and completeness of information disclosure. The regulating ideas of SZSE cover three aspects: 1) to implement regulation according to law and reduce administrative intervention; 2) to strengthen information disclosure and after-the -event regulation; 3) to advocate the principle of the purchasers being responsible for their own actions, and regulatory departments just take the responsibilities of their own.
He said information disclosure must be made as much as possible, including the disclosure of the information about the technology transfer and development and the market environment of technologies and products of listed companies to help investors to make accurate judgment on the value of the companies; the legal function of the principles of openness, equitability and fairness should be brought into play in the governance of the companies to restrict the companies' internal activities. The independent director system should be set up; bring into play the role of intermediaries to restrict the activities of the companies; the regulatory departments set up a database for the regulation of companies to ensure the strictness, systematization and continuity of the regulation.
The official also said it is not enough to just rely on information disclosure. A concept of corporate governance should be introduced in the regulation and written down in the rules. The corporate governance includes the power counterbalance system, stimulation and restriction system, internal management system and standardized operation system.
On the forum, an official from a responsible department also revealed for the first time that the market maker system would be introduced in the GEM. The official said although the market maker system has not been mentioned in the recently issued drafts of the rules for the GEM, after repeated discussions among the members of the rule drafting group, they believe that the market maker system has many advantages and cases of success. So, the domestic GEM is bound to introduce market maker system. (Panorama)
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