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QINGDAO TODAY
在线翻译:
szdaily -> Markets -> 
Tech board breeding ground for reforms
    2019-04-25  08:53    Shenzhen Daily

CHINA’S newest stock trading venue is more than just an effort to keep startups at home. It’s a laboratory for rules that could eventually ripple across the nation’s US$7.6 trillion equity market.

Regulators waived restrictions on how companies are priced when they list and eased reviews for applicants seeking to go public on the technology board, while introducing curbs on retail investors that dominate China’s broader markets. Nearly 100 firms have applied to list through instruments including what could be the first ever China depositary receipt.

While wider adoption of the regulations would align Chinese bourses closer with their global peers, the magnitude of swings once the venue starts operating could be a key determinant in how fast the regulations are replicated.

“The sci-tech board is the breeding ground for major listing reforms,” said Alexious Lee, head of China capital access at CLSA Ltd. “We will see the Chinese market’s mechanisms get closer to global standards.”

Stocks may start trading on the new venue as early as June as officials say they will limit the review period for initial public offering (IPO) applications to three months.

Some previous attempts at creating new trading venues, such as the strategic emerging industries board, haven’t yet seen fruition. The ones that reached completion, such as the ChiNext in Shenzhen, imposes a narrower band within which a stock can swing. They also include rigid regulatory vetting and keep out pre-profit companies.

Shanghai’s Nasdaq-style marketplace will have no such restrictions. The stock exchange this year clarified that companies will be free to “price according to the market,” in contrast to informal guidance that has kept Chinese IPO valuations at or below 23 times earnings.

Regulators also allowed for shares with unequal voting rights, a controversial step that grants founders greater control, and will only permit investors with half a million yuan worth of assets in their trading account and two years of experience, which is outside the reach of most retail clients.

The preference for institutional investors will probably ensure that early trading isn’t as volatile as when the ChiNext started operating, though there will be some speculation, according to Zhang Gang, a Shanghai-based strategist at Central China Securities Co. (SD-Agencies)

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