China will support Shenzhen’s lead in capital market construction

China will support Shenzhen to take the lead in capital market construction under the newly implemented plan for comprehensive pilot reforms in Shenzhen, said China’s top securities regulator on Sunday.

“ChiNext reform and the pilot registration-based IPO system has been implemented since late August and achieved some progress,” said Yan Qingmin, vice chairman of the China Securities Regulatory Commission (CSRC) at a press conference about comprehensive pilot reforms in Shenzhen.

As of October 15, a total of 414 applications for the issuance and listing of companies have been accepted, according to Yan. Among them, the Shenzhen Stock Exchange (SZSE) has approved 93 companies, 42 companies have been registered by CSRC, and 36 companies have been listed. 

Under the registration-based IPO system, the SZSE examines IPO applications based on corporate disclosures. Companies no longer need to go through the CSRC for approval before listing, which shortens the time for them to go public.

“Meanwhile, guidelines on infrastructure public offering of real estate investment trust funds have been issued, with projects currently in recommendations and screening. And the SZSE has quoted CSI 300 ETF Options for trading last December,” Yan noted.

He also mentioned that CSRC has adjusted the threshold for innovative red chip companies at the end of April, or companies registered overseas but operate in the Chinese mainland, and clarified the institutional innovation arrangements for such as the agreement control structure and the reduction of stock shares.

Based on the list of the first batch of authorized items for comprehensive pilot reforms in Shenzhen issued Sunday, China will support Shenzhen to take the lead in capital market construction, including promoting the ChiNext reform, and establishing a transferring listing mechanism for companies listed on the National Equities Exchange and Quotations (NEEQ), or the “new third board.”

In addition, the Shenzhen stock index futures will be launched to continuously enrich the stock index futures product system.

The country will also improve the domestic issuance and listing system of innovative companies, promote the issuance of shares or Chinese Depository Receipt (CDR) and listing on the SZSE for innovative companies and protect the legitimate rights and interests of investors.