A Research On Introducing Market-making Legal System Into China’s OTC Market

OTC market is a multi-level capital market organic composition, construction OTC trading systemneeds to determine. Maker system as a mature trading system abroad, in foreign developed capitalmarkets play a very important role, the role of market makers for the stock market has many, marketmakers through stocks, bonds and other securities pricing, resolve the pricing problem, it can bethrough the implementation of an active trading market making obligations, securities market toimprove liquidity and attract investors to improve the financing capacity of the market. China’s OTCmarket exists many problems, such as trading was light, limited financing capacity, the introductionof market-maker system can solve these problems to some extent, and therefore need to explore theintroduction of market-maker system. The introduction of market-maker system needs to draw onthe success of the securities market maker system in developed countries, according to China’snational conditions of China’s market-maker system design, basic design is built on the legal marketmaker system. Why text around the country to introduce a market-maker system, the role of themarket maker system, and how to design the system, from the perspective of law is analyzed, it isrecommended to select mix of OTC market trading system, which includes the auction tradingsystem trading system, the market maker system, protocol trading system, in which the marketmaker system can play a big role in making the OTC market can really support our SMEs.Paper consists of three parts:The first part of the market maker system to define, analyze strengths and weaknesses, and auctionsystem were compared, and then explain the necessity of introducing market-maker system, themarket maker system capable of accurately valuing securities pricing, active trading, enhancemarket financing capacity.The second part details and assessment of the U.S. NASDAQ market maker system, the Britishmaker system maker system in Taiwan, China and emerging markets, the rule for these rights andobligations of market makers in several developed countries and regions, and qualifications obtainedare described, the market maker system in these countries and regions have important referencevalue for China to introduce market-maker system.The third part of the thinking from the perspective of the law, the legal principles established marketmaker system, the legal system and build a market maker, including the legal rights and obligationsof market makers regulatory regime and market makers and regulators between equal subjectsregime. Sound business rules system can be a good market makers in all aspects of normativeguidance for the operation of market makers to provide clear guidelines and a comprehensivemonitoring system can maintain market order, the protection of investors and market makers toprevent illegal.