Information Disclosure, Delisting Mechanism and Market Operation under the Registration-based IPO System—From the Perspective of Agent-based Modeling

Abstract

Abstract: The registration-based IPO system is the flagship project in the comprehensive reform of the China’s capital market. This paper focuses on two core elements of this reform: information disclosure and delisting mechanisms, aiming to analyze and prevent the micro-mechanisms and risks. By constructing an artificial stock market and simulating potential risks and their evolution, the study finds that: first, the different information processing capabilities of individual and institutional investors may increase market information asymmetry; second, the disappearance of shell value and implementation of delisting mechanisms may lead to short-term market volatility; third, the reasonable combination of information disclosure and delisting mechanisms may enhance market operation quality. Our recommendations: first, build a differentiated information disclosure system guided by investor demand; second, prevent increased market volatility due to the disappearance of shell value and implementation of delisting mechanisms; third, seek synergistic solutions for the market mechanism design of the registration-based IPO system from a system perspective. The paper provides valuable insights for policymakers in effective market regulation and mechanism design.

Key words: registration-based IPO system, information disclosure, delisting mechanism, risk prevention, agent-based modeling

Cui Yian, Yang Zonghang, Wei Lijian, Xiong Xiong. Information Disclosure, Delisting Mechanism and Market Operation under the Registration-based IPO System—From the Perspective of Agent-based Modeling[J]. Management Review, 2024, 36(11): 218-226,247.

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