SHANGHAI May 16 China has relaxed rules for
firms to list or issue shares on its Nasdaq-style board in
Shenzhen, which will support the growth of cash-short smaller
companies and the continued outperformance of the so-called
ChiNext market over blue chip stocks.
New regulations announced by the China Securities Regulatory
Commission (CSRC) on Friday lower the financial requirements for
firms to issue shares in the market and simplifies procedures,
although rules were tightened for information disclosure.
For instance, any company which has made profits for two
consecutive years can now apply to issue shares in the market,
according to the new rules dated Wednesday, with immediate
The previous rules announced five years ago had many
restrictions such as how much profit firms must make before they
can apply to issue shares on ChiNext.
"The new rules are aimed at standardising the securities
issuance behaviours of the companies trading on the ChiNext
market and protecting the legitimate rights of investors and the
public interest," the CSRC said on its official microblog.
China launched its second board on the Shenzhen Stock
Exchange in 2009, and since its establishment, the market has
been the primary speculative target for retail investors, who
dominate the country's stock market and tend to speculate in
The market's main index jumped to a record high
of 1,521 points in late February, bucking the overall weakness
of China's stock market, although it has since staged a
correction to close at 1,232 points on Friday.
(Reporting by Lu Jianxin and Pete Sweeney; Editing by