China could be gearing up to take on New York and Hong Kong when it comes to listing technology companies on the stock exchange, publishing draft rules for a startup board that is similar to Nasdaq.
Reuters, citing the China Securities Regulatory Commission, said the technology innovation board would list companies in the tech and emerging sectors with a focus on high-tech manufacturing equipment, new energy, biotech, Big Data and cloud computing.
“This will enable the capital markets to support the development of China’s core technologies and innovative capabilities,” the regulator said in a statement posted on its website. “It will also help Shanghai become an international financial center, as well as a hub for technology innovation.”
Reuters noted that in November, President Xi Jinping announced the plans for the board, saying it was aimed at fighting back against U.S. curbs on Chinese tech companies and developments. It also comes as the U.S. and China are embroiled in a trade war.
Given that China did not have much luck with two previous boards, the report noted, the country is adding regulation to make the listing process easier. The board will have an accompanying registration-based system for initial public offerings (IPOs). The criteria to list will be less stringent, allowing companies that aren’t yet profitable, as well as startups that have weighted voting rights, to list on the exchange.
In a separate document issued by the Shanghai Stock Exchange, the exchange said that daily trading limits would be increased on the new board by allowing shares of stocks to rise and fall by as much as 20 percent before trading is suspended. What’s more, Reuters reported that there won’t be any daily limits for the first five days that a stock is newly trading on the board, with the aim of providing more flexibility in trading.
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