The function of the capital market is to maximize the conversion of savings into investment and to optimize capital allocation based on this. It can be seen that the capital market is a special form of market, a combination of micro and macro. From the perspective of the formation process of capital market efficiency, it has obvious hierarchies, during which it has successively passed through three thrilling jumps from savings to investment, smooth capital flow and reasonable capital allocation. At the same time, the above three major jumps are not separated from each other. They succeed in time and exist in space. Therefore, the author believes that capital market efficiency is an organic combination of conversion efficiency between savings and investment, capital market transaction efficiency and capital asset pricing efficiency. Among them, conversion efficiency is the source and basic premise of capital market efficiency; transaction efficiency is an inevitable requirement for capital liquidity and optimal allocation; pricing efficiency is at the core of the entire capital market efficiency and is a concentrated expression of the effects of capital circulation and allocation. Obviously, both conversion efficiency and transaction efficiency are necessary conditions and basic guarantees for pricing efficiency, and the improvement of transaction efficiency and pricing efficiency will inevitably lead to the same change in conversion efficiency. In other words, the three components of capital market efficiency are successive, mutually restrictive and mutually reinforcing. Therefore, in order to improve the efficiency of my country's capital market, we must simultaneously improve the above three major efficiencies.

1. Countermeasures to improve the efficiency of conversion between savings and investment

The key to improving the efficiency of conversion between savings and investment is to increase the enthusiasm of the entire society to expand reproduction, so as not to reduce normal production Increase the proportion of savings converted into investment in the context of consumption. From the perspective of the composition of savings, the speculative motivation of savings is the driving force for the mutual transformation between savings and investment. Under the economic man hypothesis, the necessary condition for its transformation into investment is: expected capital return rate > average savings interest rate. Therefore, the fundamental way to improve the conversion efficiency of the capital market is to stimulate the conversion of speculative savings into investment by increasing the gap between expected capital return rates and market interest rates. Among them, interest rate policy is the core of a country's macro-monetary policy. It has been proven by practice that lowering interest rates can effectively promote the conversion of speculative savings into investment, but it is impossible for a country to lower interest rates indefinitely. Therefore, the key to improving the transformation efficiency of my country's capital market is to increase the expected return on capital. Reducing expected risks in the capital market can effectively increase investors' expected capital returns. In this regard, the author believes that we can start from the following two aspects: 1. Establish an integrity mechanism for my country's capital market. A sound capital market integrity mechanism can help improve investors' trust in the quality of earnings of listed companies, thereby reducing their expected investment risk levels. The core of establishing an integrity mechanism in my country's capital market is to strengthen independent auditing and supervision. At present, the quality of independent audit supervision in my country is worrying. This is mainly reflected in the fact that accounting firms are limited by their professional level or are under pressure to fully disclose the false accounting information of listed companies. In view of this, the author believes that the supervision quality of independent auditing in my country should be further strengthened from the following three aspects: (1) Improve the independence of certified public accountants. The failure to reveal the accounting information whitewashing problem of listed companies is often due to the weak independence of accounting firms. Accounting firms, which are subject to many factors such as market competition and local government regulation, find it difficult to carry out economic assurance business in a truly independent, objective and impartial manner. By establishing an orderly competition mechanism in the audit market, the pressure of malicious competition faced by accounting firms can be effectively alleviated. By reducing local government support for local listed companies, the political pressure faced by accounting firms can be effectively alleviated, thereby improving their independence. (2) Vigorously improve the professional level of certified public accountants. The audit business of listed companies is becoming increasingly complex, requiring certified public accountants to have richer knowledge, experience and skills. On the one hand, certified public accountants should strengthen their own follow-up learning, constantly add fresh knowledge, and improve their professional quality and professional level; on the other hand, accounting firms should improve their own business management level, establish a scientific concept of talent, and prevent excessive loss of talent. . (3) Give full play to the role of the legal system. The audit practice should be truly placed under the constraints of economic interests, so that even as a pure economic person, the certified public accountant "has to be ethical". More importantly, it is necessary to provide powerful legal weapons for the majority of investors who have suffered losses in their legitimate rights and interests due to false statements in securities. Therefore, the practice of credentialing evidence by certified public accountants should be changed to change the practice of complaining evidence by vulnerable groups, and a collective civil compensation system should be introduced to truly reflect the deterrent effect of the law. 2. Promote innovation in financial products. Investors' need to avoid risks is always accompanied by their profit requirements. In a mature capital market, hedging and speculation are two essential and mutually reinforcing investment behaviors. Promote innovation in financial products and vigorously develop financial derivatives that can help investors effectively avoid capital market risks, thereby reducing their risk expectations for investments. For a long time, my country's capital market has had a single financial variety, which has been unable to help investors hedge risks for their market transactions. In view of this, the author believes that the innovation of financial products in my country's capital market should be promoted mainly from the following two aspects: (1) Stock index futures. Speculators, as counterparties, assume the risks that hedgers need to avoid based on their judgment of market trends, so that investors can effectively hedge risks and achieve the purpose of hedging. (2) Combination varieties.

Combination varieties are investment portfolios composed of basic varieties, derivative varieties and other combination varieties. It mainly uses the principle of diversified investment to achieve the balance between risk and return by diversifying funds into various markets and products in different proportions. balance. Therefore, portfolio varieties enable investors to effectively diversify risks by selecting high-quality investment tools through "expert financial management".

2. Countermeasures to improve the transaction efficiency of the capital market

Transaction efficiency refers to the efficiency of the market's own transaction operations, that is, whether the capital market can generate the lowest transaction costs for transaction services of a specific quality. . Therefore, improving transaction efficiency means minimizing transaction costs without weakening the function of the capital market. In my country, transaction costs mainly consist of financing costs in the primary market and transaction costs in the secondary market. Among them, financing costs are the total financing fees paid by financiers from preparation of issuance to capital recording, mainly including underwriting fees of investment banks and intermediary fees paid to intermediaries such as lawyers, accountants, and appraisers. Transaction costs are the total transaction fees paid by investors from transaction preparation to transaction completion, mainly including transaction commissions and stamp taxes. It can be seen that the reduction of transaction costs can be achieved in both the primary market and the secondary market:

(1) Reduce primary market financing costs

1. Transition from the issuance system to the registration system . From the perspective of institutional economics, transaction costs are an institutional arrangement. In other words, in addition to their explicit manifestations, transaction costs also include rent-seeking costs under different systems. It is undeniable that the transformation from the approval system to the approval system was a breakthrough in my country's securities issuance system. The stock listing recommendation system officially implemented in 2004 changed the government recommendation to the recommendation of securities companies, thus initially establishing the responsibilities of intermediaries. Mechanism is conducive to the formation of a transparent market environment and standardized market order. However, what should be noted is that the current issuance system still places too much emphasis on human factors rather than market standards, resulting in the rent-seeking costs of primary market issuance still existing. At the same time, companies that publicly issue securities must meet certain issuance conditions that are higher than those of ordinary companies, which induces companies to window-dress their publicly disclosed information, resulting in high packaging costs. According to the development laws of the capital market, the direction of innovation in the issuance system must be towards the registration system. The outstanding feature of the registration system is that it strengthens the responsibility mechanism of intermediaries and strengthens the openness and authenticity of information disclosure, which is expected to greatly reduce the rent-seeking costs of primary market issuance. At the same time, the registration system emphasizes ex-post supervision rather than ex-ante approval, so it can also curb the window dressing behavior of IPO companies to a certain extent and reduce packaging costs in the financing process.

2. Introduce competition to reduce intermediary fees. Compared with the development speed of listed companies, the development speed of my country's entire intermediary service industry lags significantly behind. The current securities industry franchise system has many shortcomings, which has kept my country's securities service institutions in a state of sub-competition for a long time. The result of improper government regulation is unscientific management and operation of intermediary agencies and abnormally high intermediary service charges. Therefore, the author believes that the current practice of using the number of certified public accountants or chartered lawyers as the single criterion in the approval of charter qualifications should be abolished, and instead a complete set of evaluation systems based on the performance of the economic assurance function in the current year should be established. In addition, pre-approval will be changed to ex-post supervision, the securities industry service qualifications will be fully liberalized, and service institutions capable of completing economic verification functions can become market access entities, so as to promote intermediaries to reduce costs and improve efficiency from both regulatory policies and market competition. service quality, thereby reducing intermediary fees for primary market issuance.

(2) Reduce secondary market transaction costs

As mentioned above, transaction costs mainly include transaction commissions and stamp duties. As far as the commission system is concerned, liberalization and flexibility are inevitable trends in future development. my country's current trading commission has been adjusted from the original "single fixed commission system" to a "maximum downward floating system", and the further reform direction is to gradually implement a free negotiation system. Therefore, at this stage, the focus of reducing transaction costs in the secondary market lies in the adjustment of the tax system for securities transactions in my country's capital market. Judging from the experience of developed market economy countries, the general recognition of the tax system’s distorting effect on the behavior of market entities has led to a downward trend in stamp tax. Most countries have gradually abolished stamp tax and replaced it with a tax system based on securities investment income tax. market. If appropriate adjustments are made to stamp duty, it can effectively reduce secondary market transaction costs and promote the effective flow of funds. Specific adjustment measures should include the following three aspects: (1) Tax rate reduction and exemption. There are mainly the following methods to choose from: lowering the tax rate, adopting a single fixed tax, and taxing different transaction methods or objects separately. (2) One-way taxation. For the purpose of stimulating buyers, a one-way levy can be imposed only on sellers to encourage investors to purchase securities. (3) When the time comes, capital gains tax will fully replace stamp duty. Capital gains tax is a tax levied only on gains from securities transactions. Its scope and degree of impact on investors' market transactions are smaller than stamp taxes. It can improve the transaction efficiency of the capital market on the basis of ensuring a certain degree of fiscal revenue. 3. Countermeasures to improve capital market pricing efficiency

Pricing efficiency is the core efficiency of the capital market, and the optimal allocation of capital is the highest goal of effective capital market operations.

The simple process of capital allocation can be described as follows: (1) Information providers publicly disclose to the capital market information that reflects the company's financial status, operating results and future development trends with financial information as the core in order to raise funds or report on the performance of fiduciary responsibilities; (2) Information demanders accept and analyze market public information that they believe is relevant to their decision-making in order to choose investment directions; (3) Different understandings of information lead to different changes in the future expectations of capital assets by information demanders, and further cause capital Changes in the supply and demand relationship of various assets in the market will cause changes in capital asset prices; (4) With price as the coordinate and guide, capital flows to different securities assets, and capital allocation changes; (5) Changes in capital allocation will be related to information Providers have an interactive relationship. In order to make the capital flow conform to their own interests, the information providers will change the content or form of the information provided in order to affect the capital allocation. It can be seen that in the market allocation mechanism with the price mechanism as the core, the key to whether capital can achieve optimal allocation lies in the following two aspects: (1) whether investors can obtain enough information; (2) whether investors can obtain sufficient information; Able to accurately analyze the information obtained and generate sufficiently rational investment decisions. Therefore, to improve the pricing efficiency of the capital market, we can start from the following two aspects: 1. Improve the current information disclosure system and improve the transparency of the capital market. (1) Strengthen the requirements for information disclosure of listed companies, improve the decision-making relevance of accounting information and strive to reflect the authenticity of economic results; (2) Actively introduce an information competition mechanism and establish fairness among information intermediaries and institutional investors. Reasonable competition mechanism, through competition, promote all value-related information to be reflected in security prices without bias; (3) Introduce a real-time reporting system to fully disclose reliable and relevant information in a timely manner. Not very important; (4) Increase the number of corporate forecast information released and improve the reliability of corporate forecast information. Listed companies should be required to disclose management discussion letters, and the management of listed companies should be required to self-guarantee the forecast information they release. 2. Improve investors’ ability to understand and use information and guide them to make rational decisions. (1) Strengthen information services for ordinary investors by cultivating and supporting independent investment consulting companies and professional securities analysts to free them from the herd behavior caused by the lock-in of accounting information functions; (2) Create conditions to attract and expand institutional investors’ access to the capital market. The diversification of the institutional investor team will intensify their market competition, thereby making investment concepts and behaviors more rational. First, it is necessary to relax access restrictions and treat all forms of ownership equally; second, it is necessary to establish legal regulations on private equity funds so that investment funds can exist in various forms; third, it is necessary to improve anti-fraud laws and strengthen the supervision of institutional investors. .