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Table 5 Summary of policy recommendations

From: Strategic interaction between institutional investors and supervision department: a theoretical analysis of low-price collusion in SBIC

Implementation scope

Guideline

Specific sub-measure

Inquiry market system

Reduce SD’s costs of tough supervision

Extensively adopting Regtech in supervision

Strengthening cross-departmental cooperation in law enforcement

Increasing training for SD’s officials

Increase SD’s incentives of tough supervision

Take the supervision or punishment intensity of illegal quotations as a key performance indicator or plus point of SD

Link the satisfaction of the financing companies with the rewards of SD

Modify high-price culling rule

Shift high-price culling rule into extreme price culling rule

Dynamically adjust culling rate according to the distribution or concentration of quotations

External systems

Deterring potential violators

Clarify the identification criteria and punishment measures of illegal quotations in the form of law

Increase the exposure of illegal quotation

Establish a coordinated oversight system for society, the media and industry associations

Stabilize investors’ expectations to supervision policy

Establish a communication and feedback mechanism between market participants and SD