Analysis Of China's Securities Market Supervision, Based On The Individual Investor Behavior

The character of China's securities market has a obvious feature, that individual investors are the main force of the stock market and has become a huge social existence, investor behavior in the social life is growing importance. Any supervising policy to maintain a stable stock market must be based on market behavior and lead to the generation of deep-level factor analysis of the foundation. This paper analyzes the investor behavior and the stock market using actual survey data, combined with the unique characteristics of China's individual investors,such as attitudes toward risk,excessive self-confidence, emotional reactions, psychological laws, behavior characteristics and its influencing factors. On this basis, this paper presents a behavior-based analysis of securities market supervision of new interventionist ideas, building a new interventionist policy of securities market supervision.In this paper, the main content and innovative research findings are summarized as follows:1. Securities market supervison based on traditional investors rational and efficient market hypothesis must be changed in the new point of view. Microscopic analysis of securities market supervison should be from the individual's mental, behavioral rules, in order to implement more effective guidance and supervision strategies to promote the further improvement of the regulatory regime. In particular, China securities market has a unique social environment, so that our individual investors have obviously different characteristics with Western investors. More effective supervision of securities market should be from the analysis of the unique psychological and behavioral characteristics and other problems.We should establish the appropriate market monitoring mechanism, aiming to improve the degree of China's capital market equity and efficiency.2.In this paper, large-scale survey research, from the perspective of the social characteristics of individual investors,suggest that the current sociological characteristics of China's individual investors tend to be mainly for the age of polarization, the overall educational level is not high, the investment philosophy knowledge, skills, it is also not mature enough, widespread speculation, herd behavior significantly, the lack of long-term investment philosophy, and so on. The stability of the stock market decline caused by these acts.3.Attitude of the individual investor's is overall risk preferences in China. Using the survey data from six cities in China and 733 individual investors, this paper analyzes the risk attitude of investors and the factors. The results show that Attitude of the individual investor's is overall risk preferences in China.Further multivariate Logit regression analysis found that some individual characteristics of investors (such as education level, occupation), personal wealth status can significantly affect the investors risk preferences; investment experience will reduce the risk of the accumulation factor. An innovative study that investors access to information and trust in the media attitude towards risk to investors has a significant influence, specifically, the more narrow information sources, will increase investor risk appetite, while the lower level of trust to the media, risk appetite will increase.4. China's stock market fluctuations in response to the heterogeneity and has a impact of changes in investor sentiment. Specifically, when the investor sentiment is broken down into components of rational and irrational, the irrational optimism will tend to increase the risk of market price (MPR) significantly, but the rational sentiment does not change the impact to MPR. This means that when market sentiment changes because of the base value, the market price of risk does not change. Further VAR impulse response function analysis shows that irrational emotional impact of the admissibility of mood swings, which means it is not from the irrational emotional basis of risk factors.5. Because the lack of investment experience and expertise, China shareholders have the prevalence of the phenomenon of self-confidence.Study reveals an increase with age investors shares, investors will reduce the degree of overconfidence. The existence of this phenomenon can be understood as a result of the individual investor's income was significantly lower than the market trend of the reason, but also exacerbated the stock market volatility for securities market,and has brought new proposition to supervision in China.6.China's securities market has a widespread information asymmetries, such as information disclosure violations, false information, the using of insider information to manipulate stock prices and other issues. Considering the transmission of information hindered by building conditions, the paper builds up the incomplete information dynamic game model of individual investors and institutional investors,listed company, reveals that the information is distorted, and institutional investors and listed companies will use information superiority against the individual investor to gain the interests, which will leads to the emergence of many irregularities.Sothat the majority of individual investors is difficult to make the right investment decisions, and this has seriously affected the healthy development of securities markets.7.Based on the analysis of investor behavior, this paper presents a new idea which is securities market supervision interventionism. The new interventionism securities market supervision is a supervision of systemic thinking, in recognition of market players's non-rational, emphasizing the necessity and proportionality of supervision. This idea is on the premise that the regulatory objectives of China's stock market should be repositioned; basic approach is to maintain the modest nature of securities supervision; policy design should be from qualified investors management, and investor education system and the establishment of substantive information disclosed, Media intermediary supervision and strengthen legal protection of investors.These approach will advances mechanism of securities market supervision in China.The current research of securities market supervision emphasis on the function of orientation from macro-analysis basement, to avoid systemic risk from the perspective of investor protection. This paper has taken a new perspective of individualism and behavioral methods of analysis, try to analyze the behavior of individual investors, and gives out market monitoring mechanism design. Despite of some shortcomings, the paper try to provide some useful suggestions to the research and practice to securities market supervision.