Across The BorderMainland’s OTC start-up equity market to be given fillips, as Hong Kong dithers

As Hong Kong is believed to be finalising its own start-up board, the mainland’s securities regulator appears to have stolen a march on its potential rival, by announcing a planned expansion and liberalisation of the rules governing its so-called New Third Board, officially called The National Equities and Exchange Quotations.

The first batch of firms traded on the over-the-counter (OTC) market – based in Beijing and dubbed as the “nursery garden” by China Securities Regulatory Commission (CSRC) chairman Liu Shiyu – will also likely be expanded to the Shenzhen Stock Exchange soon, part of the regulator’s efforts to better connect the different layers of the mainland’s capital market.

Liu has told a government conference that the New Third Board, will be given a bigger role in cultivating technology firms.

His remarks were echoed by the Shenzhen bourse, which published a statement soon after to announce it would allow direct transfer of firms from the OTC market in Shanghai to its trading floor on a trial basis.

Hong Kong Exchanges and Clearing Limited is planning to attract more technology start-ups,and expects to create its own new board, with lower entry requirements and governance standards, especially by allowing dual-class share structures. But no timetable has yet been set for its launch.