The Conflict Of Interest, Benefit Balance, Institutional Constraint During The Process Of IPO For The Enterprise

The conflict of interest widely exists in our social and economic activities. In theprocess of issuance of enterprises shares, the different relations of interest include: theissuers and investment banks, the issuers and investors, large institutional investors andsmall investors, regulators and the issuers, regulators and investment banks, as well asthe different organizations and persons in the same institutions. These potential conflictsof interest and the benefit balancing relationships constitute the conflicts of interest andinterest balancing networks in the IPO market.Based on the research of market bodies in the process of IPO, the basic idea is,firstly analyzing the conflicts of interest and benefit balance in the process of IPO,secondly, analyzing various kinds of potential conflicts and problems which are existedin the Chinese IPO market on the basis of the first part. At last, it puts forwardcorresponding policy.It was found that “explicit” and “implicit” association of the benefit-related units inChinese IPO market is complex. The conflict of interest is very outstanding and thesystem construction is not perfect. As the key of intermediary institutions, securityunderwriters don’t pay attention to their reputation. The reputation of the investment bankcan’t transfer effective signal to the market. To this, we suppose that concrete measures ofbenefit balance and benefit restraint should include playing a powerful role in repeatedgame and reputation inspiration in the market, creating a good market competition andbusiness ethics environment, learning from the United States and other mature market,refining regulation measures which aim at the interest conflict of issuers, relatedinvestment banks and related securities analysts.