CHINA on Sunday started to solicit public opinions for the detailed operation rules of the new stock exchange which is to be set up in Beijing, a primary platform for smaller firms to meet their financing needs. These rules, unveiled on the official website of China’s National Equities Exchange and Quotations (NEEQ), or the “new third board,” where the novel bourse built upon, involved the procedures of listing, trading and membership management of the new stock exchange. Rules will conform to the current regulatory arrangements for listed companies to ensure the consistency of regulatory standards among all bourses, according to the draft. Differentiated institutional arrangement will be made tailored by the innovation-oriented small and medium-sized enterprises (SMEs), and the listing mechanism will match with the market-oriented issuance and listing mechanisms under the registration-based initial public offering (IPO) system. More flexible listing regulations will be imposed on cash dividends and equity incentives, the draft said. The stock exchange in Beijing will generally continue the trading rules of the “new third board” selected layer, as an effort to embody characteristics of SMEs stock trading and ensure the continuity and consistency of market transactions. The stock exchange will not impose a limit on the price change on the first trading day, but trading will be suspended for 10 minutes when stock prices rise by more than 30 percent or drop by more than 60 percent. Daily trading movements will be restricted within 30 percent after the first day of trading. President Xi Jinping unveiled plans for the new stock exchange in Beijing during a speech at the China International Fair for Trade in Services on Thursday. Differentiated from the stock exchanges in Shanghai and Shenzhen, the new Beijing bourse has the clear mission of serving innovative SMEs, as China’s economic resilience hinges heavily on the well-being of the country’s myriad businesses. The creation of a third bourse aims to shore up the weak link in China’s capital market, build a complementary development path for SME financing, and foster a healthy market environment for innovation and entrepreneurship, according to the securities regulator. Launched in 2013, the new third board aims to offer small and medium-sized enterprises a new financing channel with low costs and simple listing procedures. The board has offered financial services to 13,000 companies since its debut. But problems have emerged, such as insufficient liquidity and dwindling new listings, as the financing and trading rules in the system can no longer meet the needs of firms, prompting authorities to make further reforms. The creation of the Beijing exchange is part of efforts to deepen reforms of the new third board, marking a major institutional breakthrough and a new start in China’s capital market. Stressing the significance of the Beijing exchange, Sui Zhenjiang, vice mayor of Beijing, pledged that the city would solidly implement related policies to facilitate the setting up of the bourse. As the national center of science and technology innovation, Beijing has rich resources in the field and has achieved remarkable results in applying related technologies. In the future, the city will provide equity trading conditions for multinational companies investing in technology-based SMEs to promote win-win cooperation, Sui said. (SD-Xinhua) | 