China unveils trading rules for new hi-tech board, paving way for bold new market to compete with New York, Hong Kong
- Beijing will allow unprofitable tech firms, including pre-revenue biotech start-ups, to list shares on its much anticipated Technology Innovation Board
- China’s top leaders ‘resolute in supporting more technology firms’, analysts say
Investors had their first glimpse into how China’s new hi-tech board on the Shanghai Stock Exchange will function on Wednesday after regulators unveiled detailed listing requirements and trading rules that show it will incorporate innovative approaches already adapted by bourses in Hong Kong and New York.
Beijing will allow unprofitable tech firms, including pre-revenue biotech start-ups, to list on its Technology Innovation Board, according to statements published by the China Securities Regulatory Commission and the Shanghai Stock Exchange on Wednesday evening.
Foreign-funded mainland companies using the variable interest entities (VIE) structures are also welcome through the issuance of Chinese depositary receipts (CDR), giving the Shanghai bourse an edge in attracting promising companies looking to raise capital for future growth.
Companies with a dual-class shareholding structure will also be allowed to conduct fundraising on the much anticipated trading venue.
The rules give the Shanghai bourse greater freedom to attract promising technology start-ups, amid growing competition from rival exchanges including Hong Kong.