Third Board ex­change wel­comes ap­pli­ca­tions for list­ings

China Daily (Hong Kong) - - BUSINESS DIGEST - By CAI XIAO caix­iao@chi­nadaily.com.cn

The listed com­pa­nies at the Na­tional Eq­ui­ties Ex­change and Quo­ta­tions from four high-tech in­dus­trial parks that have fi­nanced about 1 bil­lion yuan ($165 mil­lion) this year and firms from across China will be al­lowed to ap­ply for list­ings on the ex­change from Tues­day.

“We wel­come all com­pa­nies meet­ing re­quire­ments to ap­ply for list­ings on the ex­change. They do not need to line up,” said Xie Geng, CEO of the Na­tional Eq­ui­ties Ex­change and Quo­ta­tions.

The ex­am­i­na­tion and ap­proval process for be­ing listed on the ex­change will be un­der 40 days.

The State Coun­cil, China’s cab­i­net, re­leased a state­ment ear­lier this month in­di­cat­ing that mi­cro, small and medi­um­sized en­ter­prises can all be listed on the board.

Prior to this, mem­ber­ship was re­stricted to com­pa­nies from the four high-tech in­dus­trial parks in China — Zhong­guan­cun Sci­ence Park in Bei­jing, Zhangjiang Hi-Tech Park in Shang­hai, Wuhan East Lake High- tech Zone in Hubei prov­ince and Bin­hai New Area in Tian­jin.

The China Se­cu­ri­ties Reg­u­la­tory Com­mis­sion last week is­sued a re­vised reg­u­la­tion on un­listed pub­lic com­pa­nies and seven sup­port­ing rules for Na­tional Eq­ui­ties Ex­change and Quo­ta­tions, the so-called Third Board.

The Third Board re­leased eight new busi­ness rules and six re­vised ones on Mon­day, in­clud­ing some cov­er­ing stock trans­fers, stock is­suance and in­vestor el­i­gi­bil­ity.

The min­i­mum fund­ing amount for an in­di­vid­ual in­vestor was raised to 5 mil­lion yuan, up from 3 mil­lion yuan.

Xie said in­no­va­tive and startup en­ter­prises are the main force of the Third Board. In­vestors are mainly ven­ture cap­i­tal funds and in­dus­try cap­i­tal, aim­ing at long-term in­vest­ment.

“The sup­ply and de­mand re­la­tion­ship determines that the Third Board will not have a very high turnover rate, but we will im­prove liq­uid­ity through ap­pro­pri­ate in­sti­tu­tional ar­range­ments,” he said.

The Third Board out­lined three trad­ing meth­ods: agree­ment, mar­ket maker and bid­ding to trans­fer shares. When choos­ing mar­ket maker, at least two se­cu­ri­ties firms must par­tic­i­pate in the trad­ing.

Listed com­pa­nies on the Third Board can seek fi­nanc­ing by is­su­ing com­mon stock, pre­ferred shares, or cor­po­rate bonds. Eq­uity fi­nanc­ing is the main method at the ex­change.

The trad­ing sys­tem of the Na­tional Eq­ui­ties Ex­change and Quo­ta­tions will go online be­tween May and Au­gust of next year.

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