As a new stock exchange market in China, growth enterprise market (GEM) performs well in the stock market due to its high growth characteristics. However, a large number of large shareholders of GEM listed companies reduce their holdings and arbitrage frequently, which makes the whole stock market unstable. Meanwhile, the stock price of the company falls sharply due to the reduction of major shareholders, which directly affects the interests of small and medium-sized investors. The legal reduction of major shareholders exerts a very significant impact on the sustainable and healthy development of the securities market as well as the protection of the interests of investors. In view of this problem, with the listed companies of gem as the research object, by using relevant public data, a research has thus been carried out on the motivation and impact of the reduction of large shareholders in GEM. Finally, from the perspective of how to prevent the illegal reduction of large shareholders, corresponding suggestions have been put forward for regulators, ordinary investors and listed companies so as to protect the interests of minority shareholders and maintain the healthy development of the whole capital market. Keywords：GEM；listed company；major shareholders’reduction；impact of reduction；information disclosure