The Shanghai Stock Exchange (SSE) released regulations for establishing the sci-tech innovation board and piloting the registration system on Wednesday, a key reform initiative for the capital market to enhance the board’s ability to serve the sector.
The SSE issued a draft of six supporting business rules for public consultation for sci-tech innovation board stock issue listing approval rules, marking the substantive operations stage for establishing the sci-tech innovation board and piloting the registration system, which will also raise market inclusiveness and strengthen market functions, according to a post on the official website of the SSE.
The consultation is open for feedback until February 20. Upon the official release of the rules, the SSE will accept filings for applications to list science and technology enterprises.
Five sets of differentiated listing indicators have been created to meet the needs of various science and technology enterprises that have mastered core technologies or those with critical breakthroughs in some stages, as well as those companies with promising prospects but facing financial difficulties.
The approval rules will give a green light to companies undergoing unresolved losses and non-profitability, and will no longer limit the proportion of intangible assets.
Meanwhile, the rules have clarified that all companies listed on the sci-tech innovation board will be required to be registered in the system. The SSE will review the listings.
All listing inquiry processes of filed companies will be published online. Investors can check the status in real time.
After filing an application, the SSE ought to finish the approval process within six months.
Under the proposed registration system, the intermediary responsibility is more strict.
Diligence checks for the sponsor and the securities service institution is an important basis for the implementation of the pilot registration system.
In terms of information disclosure responsibility, it is more important that the issuer holds the first person responsible for information disclosure, while the sponsor and securities service institution strictly controls the information disclosure of the issuer.
Investors with funding over 500,000 yuan ($74,442) and two years of investment experience are qualified to file applications for the sci-tech innovation board.
The price fluctuation limit of the company's stock has been relaxed to 20 percent.
To form a reasonable price range as soon as possible, the first five trading days after the IPO is listed will not set a price limit.
Delisting standards are more strict too. The rules clarify the major illegal violations of information disclosure and public security major violations and other major illegal delisting situations.
For market indicator class delisting, the rules have set up more complete standards with four scorecards including trade volume, stock price, number of shareholders and market value.
The rules have also made adjustment in terms of financial indicators. For instance, quantitative provisions are made on a qualitative basis to avoid “zombie” companies in multiple dimensions.
Once the delisting standard is met, the company will go through the process without a transition period, the post said.
(Compiled by Dong Feng)