Legal Study Of The Necessity And Moderation Of Governmental Intervention In The New Issues Market

New-issue market is the Primary Market of securities issuance, it is also called the Initial Public Offerings, namely, IPO. It means a series of relevant arrangements of new issues’ pricing, consignment-in and sales, among which the mechanism of pricing is the core of the system.As we all know, the function of capital market is to boost and meanwhile realize the optimal distribution of social scare recourses. The institution of IPO plays a basic role in achieving the best allocation of market recourses. Effective system of IPO can better recognize and choose out excellent corporations and provide them with adequate financial support timely. Therefore, the system of IPO is the focal point of the whole security market.As the cradle of the risks of securities, the new-issue market is closely linked with the public interests of extensive investors and the competitive order. However, the market of China exists "there-high" problems, they are the high issue price, the high price-earning ratio, and the high volume of funds. The paper does not plan to restrict to the pure technical discussion at microscopic level, rather, the author finds out that all those negative phenomenon are deeply rooted in the overdue governmental intervention and the failure of understanding the true relationship between the government and market. Thus, this paper uses the legal study of necessity and moderation of governmental intervention as a start point, after it justifies the intervention behaviors of government, it will picture the boundary of government power, and then it will give suggestions to perfect new-issue market.Apart from introduction and conclusion, the subject of this thesis is divided into five parts. The first part is a review and commentary of the original and changes of China’s system of IPO since the year of 1993. After going though the registration system phase of "Quota Management" and "Index Management" and the approval system phase of "Channel Management" and "Sponsor System", the new-issue market has slightly transferred from administration-oriented to market-oriented, yet the major role of the government has not changed. To sum up, the transitional process presents strong compulsive features and obvious inclination of Path Dependence, the step of market reform faces varies obstacles.The second part traces the newly trends of IPO reform, after we retrospect the three rounds of IPO reform since 2009, it can be easily found out that despite the guideline is marketization, the reform target is not that clear and the direction is disturbed by different kinds of interest parties. To solve the drawbacks of new-issue market, the paper studies the behaviors of market participants and comes to a conclusion that we must cut off the interest channel and require every participant to comply with its own duties.The third part analyses that the direct basis of governmental intervention is securities market failure. The author classifies governmental intervention into two categories and interprets the basic theory of governmental intervention. Furthermore, the author provides economic and legal analyses of the necessity of governmental intervention. Finally, to respond to the reality calls, pure civil and commercial law is too weak to protect the interests of investors well so that it is necessary to give public investors special protection through the way of governmental intervention.The forth part seeks the exact way and extent of governmental intervention. The author firstly depicts the game theory sight of the contest between government control and market strength, and then, it analyses the phenomenon of overdue governmental intervention and the reasons behind the surface. Therefore, the position of the government has to adjust. Lastly, aim to the core problem of issuance examination, the legal path between registration system and approval system can be selected.The last part summaries abovementioned conclusions and put up with some perfection suggestions to ensure moderation intervention. The resolution can be embarked on at two levels, namely, the macro level as well as the micro level. By means of those countermeasures, the new-issue market will be more and more mature.