China Unveils Listing Rules for Proposed new SME Beijing Stock Exchange
The China Securities Regulatory Commission has unveiled rules for the creation of the new Beijing Stock Exchange aimed at supporting innovative small- and medium-sized enterprises (SMEs). Announced last month, the new exchange will complement Shanghai’s existing Sci-Tech Innovation Board (STAR) market and Shenzhen’s start-up board ChiNext.
The draft regulations released this week deal with issuance and listing on the exchange, company refinancing and ongoing supervision. Other broader securities regulations on the supervision of public companies have also been revised as have guidelines on the issuance of convertible bonds issued by listed companies.
The listing rules, named the “Rules for the Registration of Public Offering of Shares to Unspecified Qualified Investors (for Trial Implementation) of the Beijing Stock Exchange”, set up simpler, more inclusive and precise issuance conditions and cover general requirements, issuance conditions, registration procedures, information disclosure, sponsorship and underwriting, supervision and management and legal liability. Simultaneously the CSRC updated its guidance on information disclosure for companies wishing to go public.
The refinancing rules have introduced a series of special rules aiming to meet the needs of innovative SMEs and aim to facilitate SMEs’ access to on-demand financing, flexible financing. The rules, drafted by drawing on the rules of the Shanghai Sci-Tech Innovation Board and Hong Kong’s Growth Enterprise Market, are touted as being more SME-friendly than these exchanges.
The Shanghai Stock Exchange mostly comprises large companies, banks, energy and telco firms, with the Shenzhen Stock Exchange known for its tech listings. The Beijing exchange thus aims to specifically cater to the needs of SMEs and creates an exchange close to the capital.
The CSRC is inviting public comment until 14 November on its home page or by emailing shichangbu@csrc.gov.cn with the regulations set to come into force on November 15. The draft rules for the exchange, which was announced by President Xi Jinping in September, have so far only been released in Chinese and can be found via the links below.
The first document “China Securities Regulatory Commission on Beijing Stock Exchange Guiding Opinions on the Transfer of Listed Companies to the Board (Draft for Comments)” is located here.