(Yicai Global) April 28 -- ChiNext, the Shenzhen Stock Exchange’s Nasdaq-like board for growth enterprises, plans to change its initial public offering application process to a registration-based system similar to that of the Shanghai Star Market and bourses in the United States.
The China Securities Regulatory Commission is seeking public opinions on the plan, and others covering stock issuance, listing, trading, delisting and information disclosure, CCTV reported yesterday. The Central Comprehensively Deepening Reforms Commission has already endorsed the proposal.
The experiment will divide registration procedures into a review by the exchange and registration with the CSRC, which will supervise companies to improve the quality of information disclosure in a similar way it does for the Star Market, CSRC Vice Chairman Li Chao said. The Star Market is a new board set up in Shanghai for innovative science and technology companies.
There should also be some coordination with the main boards in Shanghai and Shenzhen so they use similar review methods as the sub-exchanges, Li added, saying there will also be registration systems for refinancing, mergers and acquisitions involving public offerings. The ChiNext typically has looser requirements for listing applicants to allow growth-focused startups to apply.
Companies listing under the new ChiNext system will have no daily trading limit during their first five days of going public. After that they will be subject to a 20 percent boundary each way, twice that of the Shenzhen main board and the ChiNext’s current limits. Companies already listed on the ChiNext will also trade under the wider limits once the reform is brought in.
ChiNext will maintain similar investor requirements as previously, with new individuals needing to have average daily assets of at least CNY100,000 (USD14,100) in their first 20 days of trading and two years of experience buying and selling on the main boards.
Editor: James Boynton