Research On Regulatory Issues Of China's Securities Industry: Theory And Evidence

This paper studies the regulatory issues of China's securities industry from theoretical and empirical perspectives. Although lots of papers have studied the market performance of China's securities industry, few have done this from regulatory perspective. Beginning from the definition and characteristics of general regulation, this paper firstly analyzes the concept of securities industry regulation. Based on relevant theories on securities industry regulation, this paper continues to review the regulatory history in China's securities industry and regulatory contents, and compares various regulatory systems. In order for full understanding of the effects of securities industry regulation on the industry performance, in the framework of SCP, we use Morris and Hay's methodology to make further empirical investigation. We conclude that the present regulation system in general, and the industry exit regulation in particular, is one of the main reasons for the low efficiency of China's securities industry. Then, we further investigate this issue. It's noted that many factors, including macro ones such as government regulation and micro ones such as corporate governance, all influence securities industry's performance. So, though improvement of exit regulation for securities industry would contribute to the overall performance of the industry, we still have a long way to go.