Chinese version of Nasdaq on the way
CHINA'S securities regulator yesterday issued draft rules making it easier for start-up companies to list their shares on a planned Nasdaq-like stock exchange.
The proposals, drawing on the experiences of overseas markets, will lower requirements for initial public offerings by "innovative and fast-growing" firms, the China Securities Regulatory Commission said in a statement on its Website.
China is boosting the development of its debt and equity markets to help firms decrease their reliance on bank loans.
The planned exchange for so-called growth companies is aimed at helping smaller firms that aren't able to get funding from banks and the main stock markets.
"This will help some small companies get the cash they need to grow," Li Xin, who helps manage US$4 billion for qualified foreign institutional investors at Beijing-based Harvest Fund Management Co, told Bloomberg News. "The listing rules are more relaxed."
Authorities will "appropriately lower" listing thresholds, the statement said. Firms that want to list must still meet certain profitability and capital requirements, although these will be less stringent than main board regulations.
Under the draft rules, listing candidates will need to have been established for three years. They must have reported annual net income of at least 10 million yuan (US$1.41 million) in the previous two years. Alternatively, they must have posted net income of five million yuan in the previous year and had sales of more than 50 million yuan and annual sales growth of more than 30 percent.
A separate committee will be set up to oversee the start-up board. To take account of the higher-risk nature of start-up firms, the committee will have more members, particularly from industry, than the main board's listing committee.
The CSRC said it is seeking public feedback on the draft rules. Early reports said the exchange may kick off this year.
It said the Shenzhen bourse had contacted about 200 firms interested in the growth-enterprise board.
CHINA'S securities regulator yesterday issued draft rules making it easier for start-up companies to list their shares on a planned Nasdaq-like stock exchange.
The proposals, drawing on the experiences of overseas markets, will lower requirements for initial public offerings by "innovative and fast-growing" firms, the China Securities Regulatory Commission said in a statement on its Website.
China is boosting the development of its debt and equity markets to help firms decrease their reliance on bank loans.
The planned exchange for so-called growth companies is aimed at helping smaller firms that aren't able to get funding from banks and the main stock markets.
"This will help some small companies get the cash they need to grow," Li Xin, who helps manage US$4 billion for qualified foreign institutional investors at Beijing-based Harvest Fund Management Co, told Bloomberg News. "The listing rules are more relaxed."
Authorities will "appropriately lower" listing thresholds, the statement said. Firms that want to list must still meet certain profitability and capital requirements, although these will be less stringent than main board regulations.
Under the draft rules, listing candidates will need to have been established for three years. They must have reported annual net income of at least 10 million yuan (US$1.41 million) in the previous two years. Alternatively, they must have posted net income of five million yuan in the previous year and had sales of more than 50 million yuan and annual sales growth of more than 30 percent.
A separate committee will be set up to oversee the start-up board. To take account of the higher-risk nature of start-up firms, the committee will have more members, particularly from industry, than the main board's listing committee.
The CSRC said it is seeking public feedback on the draft rules. Early reports said the exchange may kick off this year.
It said the Shenzhen bourse had contacted about 200 firms interested in the growth-enterprise board.
