Sino-us Gem Comparative Study

Since 1990s, the world economy has stepped into the knowledge economy era. During this period of time, without Capital markets, especially the Growth Enterprise Market (GEM), "new economy" would never emerge, let alone flourish. Through comparing the Chinese GEM with NASDAQ in some key aspects, such as operating patterns, listing system, issuance and pricing, trading system and etc, this paper seeks to find out the experience and lessons that Chinese Growth Enterprise Market can learn from so that it can avoid making unnecessary mistakes and develop healthily. As to research method, this paper mainly used comparative analysis to achieve its desired goal.This paper reviewed the origin and development of Chinese Growth Enterprise Market and NASDAQ market. Then made a through comparison between these two markets in three major aspects: operation mechanism, trading system and regulatory mechanism so as to provide theoretical and practical support for Chinese Growth Enterprise Market's construction. This paper consists of four parts:Part 1: Fundamentals of Growth Enterprise Market. This part introduced some relevant concepts and the function of Growth Enterprise Market and the background and status quo of Chinese GEM and NASDAQ. Moreover, in order to further clarify the ties and differences between GEM and the Main Board, relationship between the two was also thoroughly analyzed.Part 2: Comparative analysis of the operation mechanism of GEM. The paper compared the Chinese GEM with NASDAQ in the following aspects: way of establishment, operation patterns, listing conditions, and pricing, trading patterns, market maker and withdrawal system. Based on this comparison, the paper summarized the common characteristics of these two markets and the successful experience of NASDAQ so as to make a good preparation for constructing our own GEM in China.Part 3: Comparative analysis of the regulatory mechanism of GEM.Firstly, this part summed up the regulatory theory of securities market. Secondly, it compared three major regulatory models, whose advantages and disadvantages were introduced respectively. Thirdly, it compared the regulatory model of Chinese GEM and NASDAQ and reached the Conclusion that should take the comprehensive regulatory approach. At last, it elaborated the theory and Model Selection of sponsors, compared the sponsors system of the above two markets, and gave some advice on sponsors system of Chinese GEM.Part 4: Based on Successful experience and lessons of NASDAQ, the paper explored the way of establishment, the listing mechanism, trade system, market-maker system and strict monitoring and diversified risk-control mechanism of Chinese GEM, which will provide a simple framework for the upcoming establishment of the Chinese GEM.