CHINA has finalized regulations for an innovation board that promises to smooth the way for Chinese technology initial public offerings (IPOs) and, if successful, could raise Shanghai’s profile as a capital-raising competitor to New York.

The Shanghai Stock Exchange late Friday published the rules for the tech board after considering opinions from the public on draft regulations that were introduced Jan. 30. They took effect immediately.

The Science and Technology Innovation Board will scrap limits on price and debut gains, and allow unprofitable companies to go public, but will not permit same-day buying and selling of stocks, according to the rules.

Listings on the new board will be done according to a registration system that limits official powers to control the timing of IPOs.

Those provisions alleviate two major impediments to companies seeking to tap existing equity capital markets in China.

The new board, first announced by President Xi Jinping last year, is part of policymakers’ efforts to improve capital markets and implement financial industry supply side reform. The move also helps China stem an exodus of technology listings and build its own technological know-how.

China has long wanted its tech champions to list closer to home, but many of the best-known Chinese technology firms, including Alibaba Group Co. and Tencent Holdings, chose to raise funds in international markets.

New York and Hong Kong accounted for nearly 70 percent of the money raised through Chinese mainland IPOs last year.

The new rules made some tweaks from a draft version released a month ago, but did not allow same-day settlement of trades which some market participants had pushed for. Following the principles of “a steady start and step-by-step processes,” selling shares bought on the same day was not included in this set of rules, according to the Shanghai Stock Exchange.

The lockup period for core technical personnel was reduced to one year from three years in the final rules, while the stock exchange also clarified requirements for red-chips stocks to list.

In another sign plans for the new board are progressing, the financial news website Caixin reported that the Shanghai Stock Exchange had completed recruiting employees for the board and they were slated to start work in mid-March.

(SD-Agencies)