(April 10): China unveiled new rules for the Shenzhen stock exchange’s tech-focused ChiNext board, seeking to broaden listing options and make the market more attractive to fast‑growing companies.
The measures, announced on Friday, include the creation of a fourth listing standard, designed to give greater access to high‑quality companies in emerging and future industries that may not yet meet traditional benchmarks.
Regulators will also introduce an early review process for initial public offering (IPO) applications and further refine how new shares are priced, according to a China Securities Regulatory Commission (CSRC) statement.
Trading on ChiNext will also change. Authorities said they will introduce market makers to help improve liquidity and price discovery, while new rules will speed up the execution and confirmation of large block trades, making it easier for institutional investors to complete transactions.
The ChiNext Index on Friday rose to its highest since late 2021 and is up 7.7% this year. Some of the gains are the result of investors already pricing in the rule changes after the regulator touted its plan in January.
The changes may also help rebalance China’s two main growth boards by spreading high‑tech listings more evenly between Shanghai’s STAR Market and Shenzhen’s ChiNext, said He Wenpin, a fund manager at Beijing Youhe Private Equity Management Co.
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Without the additional listing standard, many frontier technology companies — such as commercial satellite makers and advanced chip firms — have tended to gravitate towards STAR, He said. ChiNext, by contrast, has historically attracted companies focused on business‑model innovation, including biotechnology and renewable energy.
“It’s the outcome of a long‑running standoff between the two exchanges, rather than a signal that regulators are opening the floodgates,” He said. “Over time, ChiNext should finally begin to enjoy the kind of valuation uplift that STAR has benefitted from through high‑profile IPOs.”
Regulators also pledged to improve funding and merger rules, simplify refinancing procedures and strengthen oversight of how new shares are priced, while stepping up punishment for financial fraud.
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In a separate statement, the CSRC said it launched a special campaign in April to bolster corporate governance. The campaign will focus on issues such as strengthening board secretary competency, supporting third-party nominations for independent directors, and recovering misappropriated funds.
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