Caixin
Mar 19, 2019 08:12 PM
FINANCE

New Tech Board Receives First Applications

Preparations for the launch of the new board have been fast-tracked since President Xi Jinping announced it in November. Photo: VCG
Preparations for the launch of the new board have been fast-tracked since President Xi Jinping announced it in November. Photo: VCG

* On Monday the Shanghai Stock Exchange began accepting applications for listings on the new Nasdaq-style high-tech board. A number of applications were filed that day

* According to the rules, the Science and Technology Innovation Board must make and publish a decision on whether to vet each application within five working days — so the first round of candidates could be revealed this week

(Beijing) — The first group of candidates to list on China’s new Nasdaq-style high-tech board is expected to be unveiled later this week — and successful applicants could float as early as this year.

On Monday the Shanghai Stock Exchange (SSE) launched a system allowing securities firms to apply to float on its Science and Technology Innovation Board on behalf of those they sponsor. A number of brokerages submitted their applications that day, Caixin has learned.

A website dedicated to the board and linked to the main site of the SSE has also come online. The design of the site suggests it will provide public information on the status of applications, the specifics of the documents submitted, and the results of their review by an SSE expert committee.

Rules previously released by the bourse (link in Chinese) say it must make and publish a decision on whether to vet each application within five working days of receiving it. The first batch of decisions — and their applicants — could be revealed on Friday.

Preparations for the launch of the new board have been fast-tracked since President Xi Jinping announced it in November. It is seen as a testing-ground for major changes to the way the country’s existing stock markets are run. Its registration-based initial public offering (IPO) system — China’s first — is intended to simplify the lengthy approval process that companies must currently endure before they can float their shares on mainland markets.

At least 22 companies have said they were looking to float on the board, including vaccine-producer Shanghai Shen Lian Biomedical Corp., smartphone-maker Transsion Holdings, and Yantai Raytron Technology Co. Ltd., which develops imaging and sensor technology, according to a list Caixin compiled based on public information.

The SSE is supposed to decide whether to approve a listing within three months of agreeing to vet it, excluding the time it takes for applicants and their listing service providers to answer queries from the bourse. That should take no more than an additional three months, according to one of the regulations governing the board.

The China Securities Regulatory Commission (CSRC) will decide whether to register the company to list within 20 working days of the SSE approving its application, excluding the time it takes applicants to answer the regulator’s questions. The company must list within one year of obtaining CSRC approval, the regulator’s rules (link in Chinese) show.

This month the SSE released a statement encouraging brokerages to recommend companies in 34 sectors to list on the board, including in semiconductors and integrated circuits, artificial intelligence, advanced rail transit, new-energy cars, and biotech.

However, SSE officials on Monday indicated that companies in industries outside that list would also be considered as long as they showed strong signs of innovation.

“The core is the company’s scientific and technological innovation capabilities,” a senior SSE executive said at a training session of representatives of the brokerages, according to an internal memo of the meeting obtained by Caixin. Securities firms should not restrict their candidate selection to those in sectors on the SSE list, the executive said, according to the memo.

Contact reporter Fran Wang (fangwang@caixin.com)

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