The Research On The Problem Of Forming And Regulating China's Multi-level Capital Market

Establishing Multi-level capital market, not only can help to provide new financial channels for small and middle enterprises(SME) to solve their shortage of funds but also can help to provide more choices for investors to disperse their investment risk in a larger scope. There is a Main Board in current market, and it is unable to meet the demand of financing and investment. Therefore, to achieve the great interest of both sides, China must establish their own multi-level capital market to meet the needs of financing and investors.However, China's current division of multi-level capital market is still not clear. Therefore, this paper divides the capital market model into three parts: the Main Board market, Second Board market and the Outside market. Second Board market contains the SME Board market and the Growth Enterprise market (GEM), considering that SME Board market plays a important role during the process of building GEM. The Outside market is divided into two parts: Three Board market and Property rights trading market. Three Board market has two functions: First, to provide a trading platform for the emerging business practice. Second, to provide a"relief"platform or exit for a listed company when it does not meet its listing requirements on Main Board market or the Second Board market. And Property rights trading market is the primary capital trading platform, the main function is to provide platform for local property rights trading.If lacking effective supervision, multi-level capital market which has clearly levels will still be not perfect. Therefore, this paper in the end will clarify the regulatory mechanism from two sides: On the one hand, it is the policy and regulations; On the other hand, it is the regulatory agencies which contain the Securities Regulatory Commission (SFC) regulation and industry self-regulatory organizations. They both guarantee multi-level capital market operate effectively.