2022 Vol.5 Dec.No4

• Title: Market Maker System and Market Liquidity Analysis —Based on Market Microstructure Research
• Name: Cequan Fu1*, Cixuan Huang2, and Qinyi Li3,
• Company: 1China Economics and Management Academy, Central University of Finance and Economics, Beijing, China 2Gaduate school of Guangdong University of Finance, Guangdong University of Finance, Guangdong, China 3Olin Business School, Washington University in St.
• Abstract:

  As an intermediary for financial market transactions, market makers connect buyers and sellers. In the "Twelfth Five-Year Plan" outline, China emphasized for the first time that it is necessary to accelerate the reform of the financial system, increasing the number of pilot agencies for stock transfers, and accelerating the over the counter (OTC) capital investment reforms. The infrastructure of Chinese OTC market system has become increasingly large. In August 2014, the NEEQ (National Equities Exchange and Quotations) formally introduced a market maker transaction system. Companies that have been listed and those preparing to list can choose between the agreement transfer system and the market maker transaction system. This article is dedicated to studying the impact of the implementation of the market maker system on the liquidity of the NEEQ market. This article first gives an overview of the market maker system, and then focuses on the development of China’s new third board market maker system. The empirical part is based on the data of 500 companies from April 2015 to December 2016, using the difference-in-difference method (DID). The regression test studies the impact of market-making transfers compared with negotiated transfers on corporate stock liquidity, and then eliminates the time trends and fixed effects. Finally, based on the results of empirical regression and comprehensive analysis, we make policy recommendations for standardizing the market maker legal environment and diversifying the system.

  
  

• Keyword: the NEEQ market Liquidity Market making
• DOI: 10.12250/jpciams2022090502
• Citation form: Cequan Fu.Market Maker System and Market Liquidity Analysis —Based on Market Microstructure Research [J]. Computer Informatization and Mechanical System,2022,Vol.5,pp.6-10

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