Analysis of the Impact of the Beijing Stock Exchange's Strengthened Regulation on Abnormal Trading of Delisted Stocks on the A-Share Market

The Beijing Stock Exchange’s move to strengthen regulation on abnormal trading of delisted stocks is an important part of improving the normalized delisting mechanism and enhancing the quality of listed companies in China’s capital market [0]. Regulatory measures mainly target abnormal trading behaviors of stocks in the delisting arrangement period and risk warning period, which is consistent with the regulatory direction of the China Securities Regulatory Commission (CSRC) in recent years. During the same period, global stock market risk appetite declined somewhat, with the S&P 500 Index and NASDAQ Index falling by 1.12% and 2.39% respectively [0]. Against this background, the BSE’s regulatory measures may further strengthen investors’ risk awareness, making them more cautious about high-risk stocks, thus reducing the overall risk appetite of the A-share market in the short term.

1. Cross-market Risk Transmission
   : The BSE’s regulatory measures occur in an environment where global stock market risk appetite is declining, which may resonate with international market sentiment and amplify short-term market caution.
2. Investor Behavior Differentiation
   : Speculative investors may reduce trading in delisted and risk-warning stocks, while value investors may shift to focusing on company fundamentals, which will help optimize the market investor structure in the long term [0].
3. Regulatory Spillover Effect
   : The BSE’s regulatory measures may have a demonstration effect on other sectors of the A-share market, prompting regulators to further strengthen monitoring of high-risk stocks and improve the standardization of the entire capital market.

• Short-term Volatility
  : Tighter regulation may lead to a decline in short-term trading activity of delisted and risk-warning stocks; if it triggers concentrated selling by investors, it may bring local volatility risks.
• Information Uncertainty
  : Due to the lack of detailed details of regulatory measures, investors’ concerns about subsequent regulatory directions may temporarily suppress market risk appetite [0].

• Long-term Market Confidence Enhancement
  : Continuously improving delisting regulatory mechanisms helps eliminate market chaos such as ‘speculating on poor-performing stocks’ and ‘speculating on delisted stocks’, and enhances investors’ long-term confidence in the market [0].
• Value Investment Opportunities
  : After speculative trading decreases, the concept of value investment may receive more attention, and the valuations of high-quality listed companies may be reflected more reasonably.

The Beijing Stock Exchange’s move to strengthen regulation on abnormal trading of delisted stocks may reduce market risk appetite and suppress speculative trading in the short term; in the long term, it helps improve market transparency and standardization and promote the return of value investment. Market reactions are affected by various factors such as the global stock market environment, regulatory details, and investor heterogeneity. Investors need to closely monitor subsequent regulatory developments and market changes.