Protection Of The Interests Of Investors In The Conditions Of Information Asymmetry

Reinforcing the investor protection is of great significance for the development of the securities market. It is a global issue and is a more urgent task in China. Poor protection in the market environment has seriously hampered the sustainable development of the securities market in China. So we must take measures to change the poor protection condition so as to better protect investor' s interest.Now China' s securities market becomes more and more marginalized. Under this background, this thesis summarizes the serious consequences caused by the information asymmetry and analyzes the realities in China' s securities market. By applying the related research on the investor protection done by foreign scholars, this thesis argues that we can reinforce the investor protection by reducing the information asymmetry, and it also provides the specific measures for improving this situation to boost the investors' confidence as well as to promote the securities market' s sustainable development.At the very beginning, the thesis introduces the serious consequences caused by the asymmetry in information. They are the adverse selection between the securities issuers and investors, the moral hazard, the insider transactions between the institutional investors and individual investors and the market manipulation. In the following part, the thesis carries a detailed analysis on the present situation of China' s securities market from theoretical study as well as from the practice. There hasn' t been an article specifically dealing with the real situation of China' s securities market before. This thesis is the first paper analyzing the real situation of the securities market in China. So this displays its originality.Next, this thesis discusses the significance of investor protection. It believes that the investment with a better investors' protection can enhance the development of the securities market and increase the company' s value. Meanwhile, this thesis applies LLSV index appraisingthe level of the investor protection in China. To the author' s surprise, the finding shows that the legal system concerning the investor protection in China has already been sound. The inadequacy in the investor protection is because of the inefficiency in the law implementation in the securities market. This is also one of the innovations in this thesis. Then, this thesis explores the possibility of reinforcing the investor protection by reducing the information asymmetry.Finally, by combining the real situation of the securities market in China, this thesis offers many specific measures to reinforce the information from the perspective of reducing the information asymmetry. This thesis thinks that the measures to protect the investors' interest in China should be taken from three aspects: improving the revelation of the information of the listed companies to reduce the asymmetry in the information between the investors and the listed companies;increasing the power of institutional investors to change the power balance between the investors and listed companies;the market regulatory body should reinforce the regulation of the information revelation, the monitoring of the insider transaction and the market manipulation, and the law implementation. In case there are some deals not abiding the law, it should be punished or sued so as to improve the efficiency in law implementation in China' s securities market.