CSRC sci-tech board pilots new listingsBusiness | Tereza Cai 28 Feb 2019
China Securities Regulatory Commission's vice chairman Fang Xinghai said that the new science and technology innovation board will pilot the new listing policy which will require only registration with the CSRC, easing listing requirements such as allowing firms which haven't earned profit to go public.
Moreover, it will adopt a more stringent information disclosure policy.
CSRC's new chairman Yi Huiman said all the work on the new board is going well, and after it has been operated for a while, he will assess the comprehensive innovation and operation in the new system to organize the reform on the gem board and the National Equities Exchange and Quotations in order to promote the capital market and better serve high-quality economic development.
Fang Xinghai pointed out that the registration system will also help to implement a more market-oriented marketing mechanism and determine the new shares' issuance price and scale in a market-oriented way, so that institutional investors become the major participants in pricing and placement.
Another vice-chairman Li Chao added there are still stringent procedures and standards in the registration system, and as long as the intermediaries, issuers, investors, and regulators undertake their duties, he believed there wouldn't be any flood inflow situation happening.
He said that at the initial stage of the new board, it can't be ruled out that some companies' pricing might not be in line with market expectation, some firms' share price could be significantly volatile, and some firms may not fully comply with the new board's target and definition.
Yi stressed that it will further open up the entering market bottlenecks of social insurance funds, insurance, enterprise annuities, and other institutional investors, in a bid to attract more medium- and long-term funds to enter the market, promote capital market reform and opening up, and further improve the trading mechanism.
Chairman of Shanghai Stock Exchange Huang Hongyuan said that the first batch of the new board-listed companies has not come out yet, and it is hard to predict when the first one will be allowed to go public.
Huang said that those companies initially interested in listing in the new board mainly come from Beijing, the Yangtze River Delta, the Pearl River Delta, Wuhan, Chengdu, and Xi'an, covering information technology, bio-medicine, and high-end pharmaceutical industries.
He believed that there won't be large-scale centralized applications for listing in the new board.