SHANGHAI, March 27 China's securities regulator
said on Thursday that companies can issue an IPO on the Shanghai
or Shenzhen stock exchange, as it tries to inject more
flexibility into a system that has been prone to speculation and
The statement, released on the China Securities Regulatory
Commission's official microblog account, said that where a
company lists will no longer be determined by the number of
shares it plan to issue.
Allowing firms to chose where they list will be good news
for the Shenzhen exchange, which previously was largely
restricted to handling small and mid-cap companies, though its
Nasdaq-style ChiNext Composite Index of mostly
high-tech start-ups has outperformed the SSEC index of top
Shanghai listed shares over the past year.
The announcement also encouraged firms to list abroad or to
list on over-the-counter equity trading platforms, which are
geared towards small and medium-sized enterprises and offer much
looser listing requirements than the country's main exchanges.
The move comes as the two exchanges face a backlog of firms
waiting to list on the market, with data from the regulator
showing that as of March 20, 435 companies were waiting to list
on the exchange.
Over-the-counter trading platforms have had limited
popularity in China, despite several pilot projects aimed at
increasing their usage since 2006. While some analysts see them
as a viable option for small to mid-range companies to raise
funds, others have concerns about liquidity issues
The statement also said that regulations on the issue of
stocks may change this year, as the commission researches how to
reform the registration system and launches revisions to the
(Reporting By Natalie Thomas; Editing by; Ron Popeski)