Introduction
The formation and development of the securities market
The basis for its formation
The emergence of securities has a long history, but the The emergence does not mean that the securities market emerged at the same time. The securities market only emerges when the issuance and transfer of securities are made public through the market. Therefore, the formation of the securities market must have certain social conditions and economic foundation. The securities market was formed during the period of free capitalism. The emergence of joint-stock companies and the deepening of the credit system were the basis for the formation of the securities market.
First of all, the securities market is an inevitable product of the development of commodity economy and socialized large-scale production. With the further development of productivity and the increasing socialization of the commodity economy, capitalism has transitioned from the free competition stage to the monopoly stage. Capitalists can no longer meet the needs of huge capital growth by relying on the original bank loan capital. In order to meet the demand for capital expansion in socialized large-scale production, a new means of raising funds is objectively needed to adapt to the needs of further economic development. In this case, securities and securities markets came into being.
Secondly, the establishment of joint-stock companies provided necessary conditions for the formation of the securities market. With the further development of productivity and the increasing scale of production, the traditional sole proprietorship and feudal family businesses can no longer meet the needs of capital expansion. As a result, partnership organizations emerged, and then pure partnership organizations evolved into joint-stock enterprises—joint-stock companies. Joint-stock companies raise funds from the public through the issuance of stocks and bonds to achieve the concentration of capital and meet the rapid growth of funds for expanded reproduction. Therefore, the establishment of joint-stock companies and the issuance of company stocks and bonds provide a solid foundation for the emergence and development of the securities market.
Thirdly, the development of the credit system promoted the formation and development of the securities market. Due to the development of the modern credit system, credit institutions have developed from single intermediary credit to direct credit, that is, direct investment in enterprises. As a result, financial capital gradually penetrated into the securities market and became an important pillar of the securities market. Credit instruments generally have requirements for circulation and realization. Securities such as stocks and bonds have strong liquidity. The securities market creates conditions for the circulation and transfer of securities. It can be seen that the more developed the credit system is, the more likely it is to mobilize more of the public's monetary income into monetary capital and invest it in the securities market. The rise of the securities industry has also opened up broad prospects for the development of modern credit systems.
Western securities markets
The formation and development of securities markets in Western countries
In Western countries, the securities market has gone through three stages of formation, development and perfection.
(1) The formation stage of the securities market (from the beginning of the 17th century to the end of the 18th century)
Looking back at the history of capitalist economic and social development, the initial germination of the securities market can be traced back to the early 16th century. Western Europe during the period of capitalist primitive accumulation. At that time, Lyon in France and Antwerp in Belgium already had securities trading activities, and the first to enter the securities market were national bonds. At the beginning of the 17th century, with the development of the capitalist economy, a production and management method in which ownership and management rights were separated emerged, that is, joint-stock companies were formed and developed. The formation of joint-stock companies enabled the issuance of stocks and bonds, which brought stocks, corporate bonds, etc. into the ranks of securities transactions. In 1602, the world's first stock exchange was established in Amsterdam, the Netherlands.
In 1773, Britain's first stock exchange was established at "Jonathan's Coffee House" and was officially approved by the British government in 1802. This stock exchange was the predecessor of the London Stock Exchange. The exchange's trading products were initially government bonds, and later corporate bonds and mining and canal stocks were traded on the exchange.
In 1790, the first stock exchange in the United States, the Philadelphia Stock Exchange, was established to engage in the trading of government bonds and other securities.
On May 17, 1792, 24 brokers gathered under a sycamore tree on Wall Street and negotiated an agreement called the "Sycamore Tree Agreement", agreeing to meet under the sycamore tree every day. Party, engage in securities trading, and set minimum standards for trading commissions and other trading terms.
In 1817, these brokers jointly formed the "New York Stock Exchange", which was renamed the "New York Stock Exchange" in 1863. This was the predecessor of the famous New York Stock Exchange. Under the influence of the capitalist industrial revolution in the 18th century, joint-stock companies became a common form of corporate organization in industries such as railways, transportation, mining, and banking, and their stocks and various types of bonds were circulated in the securities market. The market has basically taken shape.
The characteristics of the securities market during this period are: the credit instruments are very simple, mainly in the form of stocks and bonds; the securities market is small in scale and mainly operated manually; the securities market prices fluctuate greatly, and speculation and fraud , Manipulation is very common; securities market legislation is very imperfect and the securities market is relatively fragmented.
(2) The development stage of the securities market (from the early 19th century to the 1920s)
From the industrial revolution that began in the 1870s, to the mid-19th century, it had Capitalist countries have been completed one after another. The Industrial Revolution promoted the rapid development of the machine manufacturing industry and enabled joint-stock companies to be generally established in the machine manufacturing industry. For example, the Industrial Revolution in Britain was completed in the late 1830s and early 1940s. The large-scale machine industry has replaced the traditional handicraft industry, and the machine manufacturing industry has gradually gained a dominant position in the industrial system. From the 1870s to the 1880s, joint-stock companies developed greatly.
In 1862, there were 165 joint-stock companies in the UK. In the mid-1980s, there were more than 15,000 registered joint-stock companies. This process that happened in the UK happened in all capitalist countries without exception. After the industrial revolution in European and American capitalist countries such as the United States, France, and Germany, joint-stock companies quickly became the main organizational form of enterprises. The establishment and development of joint-stock companies has led to the continuous expansion of the issuance of securities. According to statistics, the world's securities issuance amounted to 76.1 billion francs from 1871 to 1880, 64.5 billion francs from 1881 to 1890, 100.4 billion francs from 1891 to 1990, 300 billion francs from 1911 to 1920, and 300 billion francs from 1921 to 1930. to 600 billion francs. At the same time, the structure of marketable securities has also changed. The dominant position in marketable securities is no longer government bonds, but company stocks and corporate bonds. According to statistics, among the securities issued from 1900 to 1913, government bonds accounted for 40% of the total issuance of securities, while corporate bonds and various stocks accounted for 60%.
Looking at the securities market during this period, its main characteristics are:
First, joint-stock companies gradually became the main form of enterprise organization in the economy and society;
Second, the issuance of securities continues to expand and has begun to take shape;
Third, some countries have begun to strengthen securities management and guide the standardized operation of the securities market. For example, the United Kingdom promulgated the Joint Stock Company Regulations in 1862. Germany's Limited Liability Company Law passed in 1892, France's Company Law in 1867, Japan's Securities Exchange Law in 1894, etc.; Fourth, the securities trading market has developed. For example, the Tokyo Stock Exchange in Japan was formed in 1878, and the Zurich Securities The exchange was founded in 1877, the Stock Brokers Association was established in Hong Kong in 1891, and it was renamed the Hong Kong Stock Exchange in 1914, etc.
(3) The perfection stage of the securities market (since the 1930s)
The economic crisis from 1929 to 1933 was the most serious, profound and destructive economic crisis in the capitalist world. This crisis seriously affected the securities market. At that time, the stock prices of the world's major securities markets plummeted, the market collapsed, and investors suffered heavy losses. By July 8, 1932, the Dow Jones industrial stock price average was only 41 points, only 11 points from its peak level in 1929.
The great crisis has made governments of various countries clearly realize that they must strengthen the management of the securities market. Therefore, governments around the world have formulated securities market regulations and established management agencies to legalize the securities trading market. For example, from 1933 to 1940, the United States successively formulated the Securities Exchange Act, the Securities Act, the Trust Clauses Act, the Investment Advisor Act, and the Investment Banking Act. Other countries have also implemented comprehensive control and management of securities issuance and securities transactions in the securities market by strengthening legislation.
After the end of World War II, with the recovery and development of the economies of capitalist countries and the economic growth of various countries, the securities market also recovered and developed rapidly. After the 1970s, the securities market experienced a highly prosperous situation. The scale of the securities market continued to expand, and securities transactions became increasingly active. During this period, the operating mechanism of the securities market underwent profound changes, and some obvious new characteristics emerged.
1. Financial securitization. The proportion of securities in the entire financial market has increased sharply, and its status has become increasingly prominent. Especially in the United States, with the emergence of new financial instruments, securities investment activities have been carried out extensively and effectively; in Japan, in the 1960s, corporate funds mainly relied on bank loans, and securities financing accounted for less than 20% of the total financing. By 1978 In 2017, the proportion of financing raised by issuing securities has risen to 44%. At the same time, securitization trends have also emerged in residents’ savings structure. Due to the need to maintain and increase returns, people shift their savings from bank deposits to securities investments.
2． Diversification of the securities market. This is mainly reflected in the continuous expansion of the types, quantities and scope of issuance of various securities; the increasingly diversified trading methods. In addition to spot securities trading, there are also futures trading, options trading, stock price index futures trading, and credit trading. and other transaction methods.
3． Securities investment legal personization. After World War II, portfolio investing changed. In addition to individual public subscriptions for securities, the proportion of securities investments made by legal persons is increasing day by day. Especially after the 1970s, with the large-scale entry of pension funds, insurance funds, and investment funds into the market, the legalization and institutionalization of securities investors further accelerated. Corporate investors have expanded from financial institutions in the past to various industries. It is estimated that corporate investment accounts for about 50% of the world's securities markets.
4． Legalization of the securities market. After the Second World War, Western countries paid more attention to the legal management of the securities market, continuously formulated and revised securities laws and regulations, and continuously promoted the standardized operation of the securities market. At the same time, through various technical supervision and management activities, the securities market regulations are strictly enforced, the securities market conditions tend to be stable, and speculation, manipulation, and fraud in the securities market are gradually reduced.
5. The securities market is networked. Computer systems have been used in the securities market since the second half of the 1950s. In early 1970, the London Stock Exchange adopted a market price display device. In February 1972, the United States established the "National Association of Securities Dealers Automatic Quotation System". In 1978, the New York Stock Exchange created the "Intermarket Trading System", which used electronic communication networks to connect exchanges such as Boston, New York, Philadelphia, and Cincinnati, so that the price and trading volume of each stock in each exchange could be displayed on the screen. , brokers and investors can directly buy and sell securities on any securities market. So far, all major securities markets in the world have basically been computerized, which has greatly improved the operating efficiency of the securities market.
Promoted by computer-based network technology, the networking of the securities market has developed rapidly, which is mainly reflected in the rapid development of online transactions.
Compared with traditional trading methods, the advantages of online trading are:
First, it breaks the time and space constraints, and investors can trade anytime and anywhere;
Second, it is intuitive and convenient. Not only can you browse real-time trading conditions and check historical data (announcements, annual reports, operating information, etc.) online, but you can also conduct online consultations;
Third, the cost is low, whether it is securities The cost can be greatly reduced for both companies and investors. There is no doubt that the networking of the securities market will be one of the most basic development trends of the securities market.
6． Internationalization of securities markets.
Modern securities trading is becoming increasingly global. Computer system devices are used in securities business. Brokers in the world's major securities markets can communicate with foreign business institutions around the clock through electronic computer systems located in their own countries. Major stock exchanges in the world They have all become international stock exchanges. They not only list a large number of securities of foreign companies in their own countries, but also set up branches abroad to engage in international stock entrustment transactions.
In 1990, there were 500 foreign companies listed on the London Stock Exchange, 110 on the New York Stock Exchange, and more than 80 on the Tokyo Stock Exchange. More and more companies are issuing stocks and bonds in securities markets outside their home countries. According to relevant information, in 1975, 80 of the 220 large companies in the United States with sales of more than US$1 billion listed their stocks for sale on foreign stock exchanges. The internationalization and global integration of securities investment have become a major trend in the development of the securities market.
7. Financial innovation continues to deepen. Before the Second World War, the securities types generally only included stocks, corporate bonds and government bonds. After the Second World War, the securities financing technology of Western developed countries has improved rapidly, and the securities types have continued to innovate. New securities varieties such as floating rate bonds, convertible bonds, warrants, installment bonds, and composite securities have emerged one after another. Especially in the last two decades of the 20th century, financial innovation has achieved great development. Financial futures and options trading, etc. The rapid development of derivatives has brought the securities market into a new stage.
Innovations in financing technologies and securities types have enhanced the vitality and attractiveness of the securities market to investors, and accelerated the development of the securities market. Innovation in securities varieties and securities trading methods is the source of vitality of the securities market. In fact, since the 1970s, financial innovation has formed a trend of accelerated development and has become a key factor for financial companies to survive and develop in fierce competition. Driven by world economic integration, along with the renewal of the material and technical foundation of the securities market and the further development of diversified investment needs, a new wave of securities innovation will form in the 21st century.
Formation and development
my country's securities market has a long history of development, but our country's securities market has unique characteristics, that is, the difference between the securities market of old China and the securities market of new China There is no direct inheritance and continuation relationship, and their market development conditions are also very different. Therefore, the study of my country's securities market must separately discuss the situations of old China and new China.
(1) The securities market in old China
The securities market in old China has a long history, during which it has experienced many twists and turns, ups and downs, and can be roughly divided into the following stages.
1. Embryonic stage (Tang Dynasty - Qing Dynasty)
Before my country did not have a securities market and modern banking industry, there were banks and bank accounts. This was the embryonic form of securities and securities markets in the feudal era.
According to historical records, as early as the Tang Dynasty more than a thousand years ago, there were stores, warehouses, etc. that also dealt with silver and silver. By the Song Dynasty, there were already stores that specialized in silver, money, Money shop and money shop for banknote transactions. After the middle of the Ming Dynasty, due to relative political stability, commodity production developed rapidly, especially in Jiangsu and Zhejiang, where cities and towns flourished, business prospered, and the financial industry flourished, giving rise to the early form of the securities market - the money market. , its operating system is strict and its business content is diverse. Starting from the Qing Dynasty, with the invasion of imperialism, a large amount of silver dollars poured in from abroad, and various currencies such as silver dollars, silver taels, coins and copper coins began to be used in various places. Therefore, the exchange of silver dollars and silver taels for coins and copper coins became the main currency of banks at that time. One of the businesses.
Later, due to the invasion of various foreign banknotes, the currency in circulation in the market further increased, and the currency exchange and buying and selling business became busier. This primitive securities activity had no fixed venue at first. Later, as the transaction volume expanded, the trading venue gradually became fixed and a tangible trading market gradually formed.
By the middle of the Qing Dynasty, this kind of money market had developed widely in Jiangsu and Zhejiang provinces. Among them, Shanghai, Hangzhou, Ningbo and Suzhou developed rapidly and gradually became the center of the country's early money market.
These markets have a very close relationship with local ethnic industry and commerce and have strong vitality. They are not only the initial form of my country's securities market, but also an important part of the old Chinese financial market.
2． The formation stage (late Qing Dynasty - 1920)
The formation of the securities market in old China, like many countries in the world, was based on the establishment of joint-stock enterprises and the issuance of public bonds by the government.
After the Opium War, China quickly became a semi-colonial and semi-feudal society. The great powers signed a series of unequal treaties with China and obtained many privileges. Under the protection of these privileges, foreign powers not only exported goods to China, but also gradually increased their colonial investment in China. Foreign businessmen opened commercial ports in China and established a large number of enterprises. Most of these enterprises took the form of joint-stock companies and incorporated foreign shares. The method of raising funds was brought to China and a large number of stocks were issued. At the same time, foreigners investing in China urgently requested the "cooperation" of Chinese businessmen in order to raise the huge capital needed for modern large-scale industry. As a result, Chinese businessmen's shareholding activities in foreign-owned enterprises became a significant phenomenon, ranging from shipping, insurance, Banks, as well as various industries such as spinning, gas, and electric lighting, are inseparable from Chinese ownership. According to statistics, the cumulative capital of foreign companies owned by Chinese businessmen in the 19th century was more than 40 million silver taels. After the 1870s, the Westernization faction of the Qing government established some civilian industries that were government-run and jointly run by government and businessmen. For example, in 1872, Li Hongzhang and Sheng Xuanhuai organized the General Steamship Investment Promotion Bureau. Later, Zhongxing Coal Mining Company, Hanyeping Coal and Iron Factory Mining Company, and Dasheng Cotton Mill were established. etc., all adopted the method of raising funds through equity offerings. With the emergence of these joint-stock enterprises, a new investment tool, stocks, emerged in China.
The earliest bonds issued in our country began in 1894. In order to meet the expenses of the Sino-Japanese War of 1894-1894, the Qing government issued "interest-bearing commercial debt" bonds. Since then, government bonds have been issued in large quantities. During the reign of the Beiyang warlords, Yuan Shikai, in order to consolidate his power, engaged in successive years of melee warfare and warlord separatism, which cost a lot of money. The government issued public bonds many times. According to statistics, during the 16 years of the Beiyang government's rule, various public bonds were issued amounting to 520 million yuan.
With the increase in the issuance of stocks and bonds, the securities trading market has also developed. In 1869, there were already foreign firms in Shanghai that bought and sold stocks of foreign companies, and it was called the "Donor Association" at that time.
In 1891, foreign businessmen established the Shanghai Stock Exchange in Shanghai. In 1905, the company was named "Shanghai Public Industry Office". It was run by foreign businessmen and was the earliest stock exchange in old China. The main trading objects of this exchange are foreign corporate stocks, corporate bonds, bonds issued by foreign administrative agencies in Shanghai, Chinese government gold coin bonds, and rubber stocks in Nanyang. China's own securities trading began around the time of the Revolution of 1911.
The period from 1895 to 1913 was the initial development period of Chinese capitalism. National industry and commerce flourished, stock issuance increased, and circulation became wider. In 1913, some large Shanghai money merchants, tea merchants and other large firms that also engaged in securities trading established the "Shanghai Stock Trading Association".
In 1914, the Beiyang government promulgated the "Stock Exchange Law", and securities trading began to get on the right track. In 1918, with the approval of the Beiyang government, the "Beiping Stock Exchange" was established, which was the first stock exchange in the country founded by a Chinese. In 1920, with the approval of the Beiyang government, the "Shanghai Stock Trade Association" was officially reorganized into the "Shanghai Huashang Stock Exchange"; in 1921, the Beiyang government approved the establishment of the "Tianjin Securities and Articles Exchange". After the establishment of these stock exchanges, their business was booming and their profits were huge, which caused investors to flock to the stock exchanges. In Shanghai alone, the number of stock exchanges increased to 140 to 150 in more than half a year in 1921.
However, in addition to a small number of domestic bonds, most of these exchanges operate stocks of the exchange, and they use temporary lending and borrowing in the banking industry, mainly futures trading, and a large number of stocks. Buy short and sell short. By the autumn of 1921, due to the monetary tightening, many exchanges were unable to maintain their operations and closed down one after another, resulting in the famous "letter exchange trend" in history. By 1922, there were only a dozen stock exchanges left in the country, causing securities trading to enter depression and decline.
3． The "Recovery" and Short-lived "Prosperity" Phase (1937-1949)
After the outbreak of the Anti-Japanese War, as the Kuomintang troops retreated, public bond trading dropped sharply, and the public bond trading market became increasingly depressed. On the contrary, after more than ten years of silence, the stock market has experienced a "recovery" phenomenon. At that time, because the Japanese and puppet authorities banned all centralized and secret trading of public debt, foreign stocks, gold and silver, foreign exchange, cotton, cotton yarn and other materials, a large amount of hot money was concentrated in Chinese stocks, and Chinese stock trading gradually flourished, specializing in stocks. The number of trading companies increased sharply. The number of stock companies and securities trading houses in Shanghai alone increased from a dozen to more than 70 in 1940. The number of securities trading houses in Tianjin reached more than 100 at its peak. The Japanese and puppet authorities once banned stocks. The transaction failed to work, so it was diverted and exploited instead.
In September 1943, the Shanghai Huashang Stock Exchange was ordered to resume operations, specializing in the trading of Chinese stocks. The number of listed companies increased to 199. Since the resumption of the stock exchange, stock speculation has been frequent, the stock market has been turbulent, and the stock price Violent fluctuations.
After the victory of the Anti-Japanese War, the Kuomintang government first banned securities trading. In August 1945, the Shanghai Huashang Stock Exchange was suspended and dissolved. However, black market trading did not stop. As a result, the Kuomintang government turned to plans to establish an official securities market.
In May 1946, the Kuomintang government decided to establish the Shanghai Stock Exchange with a capital of 1 billion yuan. Shareholders of the original Shanghai Huashang Stock Exchange subscribed for 6/10 of the shares, and the rest were held by China, Communications, and Farmers. Three banks, the Central Trust Bureau and the Central Postal Savings and Remittance Bureau subscribed. In September of that year, the exchange officially opened, with two markets: stocks and bonds. In February 1948, the Bangjin Stock Exchange opened. The exchange's share capital was 1 billion yuan. Trading was once very prosperous, and over-the-counter trading was also very active.
In 1948, the Kuomintang government announced the implementation of currency system reform and ordered all exchanges across the country to temporarily suspend operations, causing the short-term "prosperity" of the stock market to decline.
(2) The securities market of New China
In the early days of liberation, inflation, rising prices, rampant black markets, and popular speculation. In order to stabilize the market and crack down on the black market, the People's Government decided to , Beijing and other cities established stock exchanges under the management of the people's government. However, as the country's finances improved, the currency value began to stabilize and the trading volume declined. Soon, with the development of the "Three Antis" and "Five Antis" movements, securities speculation activities were controlled, and the stock exchange business gradually became depressed. The securities market in the early days of the founding of the People's Republic of China was not only short-lived, but more importantly, it was a transitional form before the securities trading activities in old China were eliminated in the early days of the founding of the People's Republic of China. By 1952, the People's Government announced that all stock exchanges were closed; in 1958, the country stopped borrowing from abroad; in 1959, it terminated the issuance of domestic government bonds. In the following 20 years, there was no securities market in our country.
After the Third Plenary Session of the Eleventh Central Committee of the Communist Party of China, with the deepening of my country’s economic system reform and the development of the commodity economy, people’s income levels have continued to increase, and social idle funds have increased day by day. Due to the lack of funds required for economic construction With the continuous expansion of the economy, the problem of insufficient funds is very prominent. Under this economic background, the calls from all aspects to establish a long-term capital market, restore and develop the securities market are getting louder and louder, and my country's securities market has emerged as the times require during the reform.
1. issuance market. The recovery and start of my country's securities issuance market began with the issuance of treasury bills in 1981. Since then, bond issuance has continued year after year, and the amount of issuance has continued to increase. The types of bonds have expanded from national bonds to the issuance of financial bonds, corporate bonds, and international bonds. my country's stock issuance began in 1984.
In September 1984, Beijing established its first joint-stock company, Tianqiao Department Store Co., Ltd., and issued shares. In November of the same year, Shanghai Feile Audio Co., Ltd., established by Shanghai Electroacoustic General Factory, issued shares to the public. Later, Shanghai Yanzhong Industrial Co., Ltd. also issued shares to the public. Some other cities across the country have also issued shares.
Under the guidance of the government, with the increase of joint-stock pilot enterprises, the scale of stock issuance in my country has continued to expand. Stock issuance involves domestic RMB ordinary A shares, RMB special B shares for domestic and foreign legal persons and natural persons to purchase, as well as overseas issuance. H shares and N shares, etc.
2． trading market. my country's securities trading market began in 1986. In August 1986, Shenyang Trust and Investment Company launched securities trading business for the public for the first time. Later, Shenyang Construction Bank Trust and Investment Company and Industrial and Commercial Bank of China Shenyang Securities Company also launched this business. In September 1986, the trust departments of several professional banks and trust investment companies in Shanghai launched stock "over-the-counter trading". In April and June 1988, the Ministry of Finance successively conducted pilot transfer markets in 61 large and medium-sized cities across the country.
By 1990, the national securities OTC market had basically taken shape. With the formation of the OTC market, the on-site trading market also developed rapidly. On November 26, 1990, the State Council authorized the People's Bank of China The approved Shanghai Stock Exchange was established and officially opened on December 19, 1990, becoming my country's first stock exchange; on April 11, 1991, another stock exchange approved by the People's Bank of my country - The Shenzhen Stock Exchange was also announced and officially opened on July 3 of the same year. The establishment of the two stock exchanges marked the transition of my country's securities market from decentralized over-the-counter trading to centralized on-site trading.
At the same time, some large and medium-sized cities across the country, such as Wuhan, Tianjin, Shenyang, Dalian and other places, have also established 27 securities trading centers to accept a variety of bond and investment fund transactions. Some trading centers are also connected to the Shanghai and Shenzhen stock exchanges, allowing the trading activities of the two stock exchanges to radiate and extend. Not only that, in October 1990, the People's Bank of China also established the National Stock Exchange Automatic Quotation System (STAQS). The system center is located in Beijing and connects large and medium-sized cities with active domestic securities trading through computer networks to provide members with useful information. It provides information on buying and selling prices of securities as well as services such as quotations, transactions, delivery and settlement. The system began to be connected to the grid in April 1991. By 1994, it had 189 member companies in 42 cities across the country.
In February 1993, with the approval of the People's Bank of China, another securities trading network, "China Securities Trading System Co., Ltd." (NET), was announced. The China Securities Exchange NET System Center is located in Beijing. It connects computer networks across the country with communication satellites to provide securities trading, trading, clearing, delivery and custody services, as well as investment consulting and information services in the securities market. The system officially opened on April 28, 1993. By 1994, the system's satellite communication network covered more than 100 cities across the country, with dozens of securities firms connected to the network.
Until 1998, my country's securities trading market once formed a hierarchical feature with "two exchanges and two networks" as the main body and a combination of concentration and decentralization. At that time, except for Beijing's STAQ and NET systems, most of the OTC markets were regional property rights trading markets set up by local governments to invigorate the local economy and promote equity flows. They are mainly positioned to solve the trading and circulation of local legal person shares, internal employee shares, fund securities, etc., and have different rules, chaotic institutions and management, and the low quality of some listed companies, which can easily cause financial risks and social problems. Although these markets have indeed played a relatively good role in the restructuring and financing of local enterprises. However, because the country has not formulated unified policies and regulations to effectively regulate and manage the over-the-counter trading market, there are many problems in over-the-counter trading.
After the Southeast Asian financial crisis, in order to prevent financial risks and rectify the financial order, local trading centers and legal person stock markets were successively cleaned up, and various forms of over-the-counter stock trading were expressly prohibited by the Securities Law. , thus forming a highly centralized two-stock system, that is, the Shanghai and Shenzhen Stock Exchanges coexist and develop, and stock circulation is concentrated in the exchanges.
However, since then, the inherent liquidity requirements of stocks and the practical needs of enterprises' shareholding reform, bond financing of various departments, investor investment, etc. have still pushed various OTC markets to become stronger and weaker in line with the strength of the central government's control, or to be underground. , the semi-underground market continues to exist. The over-the-counter agreement transfer market for legal person shares did not stop due to the closure of STAQ and NET. The most active form of this market is auction, and the auction house has become an "exchange" for legal person shares.
But by July 2001, the China Securities Regulatory Commission officially denied the compliance of this market. At the same time, technology property rights markets have emerged in various places, which have assumed some functions of the over-the-counter market. In order to solve the remaining problems after the closure of STAQ and NET, the Securities Association of China issued the "Pilot Measures for Securities Company Agency Share Transfer Service Business" on June 12, 2001, and selected six securities companies as pilot units to handle original transfers through their outlets. Transactions of circulating shares of 11 listed companies on NET and STAQ systems. Some delisted stocks will also have the Securities Association of China select qualified securities companies to handle share transfers.