File photo shows the entrance of the China Securities Regulatory Commission (CSRC) in Beijing, capital of China. (Photo:Xinhua)

Selected firms from the National Equities Exchange and Quotations (NEEQ), known as the New Third Board, will be the first batch of companies on the new Beijing Stock Exchange, according to a draft rule on Friday which is now seeking public opinion.

The 66 firms that traded on the selection tier of the New Third Board will all be shifted to trade on the new exchange, and shares traded on the innovation tier of the New Third Board for 12 months are eligible for new listings, said China Securities Regulatory Commission (CSRC) in a regular briefing on Friday when explaining the draft operating rules of the new exchange in Beijing.

Firms applying for a listing should have a proper organizational structure and sound financial conditions. They should also have no false records in financial or accounting reports and should have a record of law-abiding business operations, according to the rule.

Those qualified for delisting from the Beijing bourse are eligible to continue trading on the innovation layer and basic layer of the New Third Board, according to CSRC.

The new Beijing stock exchange will not set a trading cap for the first day of trading, and stocks will be subjected to a 30 percent upside or downside limit from the second trading day to increase market flexibility.

The establishment of the Beijing exchange, which will be the third exchange in China, will seek a differentiated development pattern from the Shanghai Stock Exchange and Shenzhen Stock Exchange, with a focus on innovation-weighted SMEs, said Zhou Guihua, an official with CSRC, at the briefing.

The new exchange aims at serving smaller and newer innovation-weighted SMEs and accredited or sophisticated investors, unlike those in the Shanghai and Shenzhen exchanges, Zhou said.

"The Beijing exchange comes as an important supplement to the existing Shanghai and Shenzhen exchanges and it is likely to be more inclusive, with a lower listing requirement," Dong Dengxin, director of the Finance and Securities Institute of Wuhan University, told the Global Times on Friday.

The new exchange will operate based on the company system, with the establishment of a board of shareholders and supervisors, Zhou added.

Global Times