China Securities Regulatory Commission (CSRC) in Beijing Photo:VCG

 
China's top securities regulator on Wednesday rolled out eight new measures to deepen reform of the Nasdaq-style sci-tech innovation board of the Shanghai Stock Exchange, also known as the STAR market.

The reforms are aimed at better serving the country's scientific and technological innovation drive and promote a robust development of new quality productive forces, expert say.

High-tech ventures that have made breakthroughs in core technologies in new and emerging industries will enjoy priority access to public listing on the STAR market. Given the characteristics of large investment volumes, long-period of research and development (R&D) as well as commercial uncertainties, high-tech companies with key innovation capability and market potential will be allowed to get listed on the board even if they haven't achieved profitability, according to an announcement appeared on the China Securities Regulatory Commission (CSRC) website.

The CSRC vowed to improve the pricing-setting for stock listings, and will adjust the elimination ratio of high pricing quotation in new IPOs on a pilot experimental basis on the STAR market.

Following the CSRC's policy announcement, the Shanghai Stock Exchange came out with provisional rules of eliminating the 3 percent ratio of high pricing quotations in future stock listings.

In addition, the CSRC said that it will establish a "green channel" to facilitate the financing and mergers and acquisitions (M&A) of high-tech firms that are aiming for breakthroughs in core technologies. It pledged support for STAR market-listed companies to conduct M&As with upstream and downstream companies to enhance supply chain coordination.

The CSRC also encouraged tech companies to carry out share incentives so as to better bind their interests with investors. In order to enhance the STAR market exchange-traded fund products, the commission said that it will study the rollout of STAR market 50 Index futures and options at an appropriate time.

It also vowed strengthened oversight on trading to promote the steady operation of the STAR market, while protecting the investors' interest with "teeth and thorns."

The CSRC said that it will crack down on fraudulent listings and other frauds on the STAR market, further hold the intermediary organs including the underwriters, the accountants and auditors accountable, and effectively protect the legitimate rights and interests of smaller investors.

The regulator said it will strictly implement the delisting mechanism and firmly prevent the emergence of "zombie" companies on the board.

On June 13, 2019, China inaugurated the sci-tech innovation board, a milestone in the country's capital market reform. As of the end of May, 572 companies had been listed on the board, and total capitalization has hit 5.7 trillion yuan ($785.8 billion), according to financial information provider Wind.

Global Times