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Shenzhen Stock Market Ready to Upstage Second Board
Shenzhen has got everything ready for the launch of the country's second board for high-tech shares, according to a senior official of the Shenzhen stock market.
"We have completed preparation work including legislation and technical arrangements. Official opening of the second board is numbered," the official said during a recent high-level seminar on the Opening of Second Board in China.
The official noted that the second board will have two prominent feathers: to substantially lower the requirements for a high-tech company to get listed; and to pursue much stricter rules in implementing corporate disclosure procedures.
While talking about share structure, the official said: "The requirements for a business to get listed on the second board are relatively lenient which implies high risk for investors, so the second board will float 100 per cent shares of a company in order that venture capital investors can withdraw from the stock market at a proper time."
China's second board market will also pursue the recommendation system. Qualified stock brokage companies will be authorized as recommenders for the high-tech companies to get listed.
The official also pointed out four problems are prone to affect companies on the second board: lacking clear destination of the raised fund, lacking the standard operation mechanism, lacking specialties on the capital market laws and debt-burdened.
The source confirmed that the CSRC, the China Securities Regulatory Commission, have agreed this December is the best time to unveil the second board.
As to the widely discussed merge of China's current two main boards in Shanghai and Shenzhen, the official said it is not practical to merge the main boards in China at the present stage. Shenzhen stock market will keep running but will no longer accept new shares. (Chinadaily)
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