First companies to list on sci-tech board in months 
2019-06-14
CHINA inaugurated its new sci-tech board yesterday, and expects to see the first group of companies listed within two months.
The Nasdaq-style board on the Shanghai Stock Exchange, formally called the Science and Technology Innovation Board, was officially launched as the SSE STAR Market.
Yi Huiman, chairman of China Securities Regulatory Commission, announced the news.
As a major step to implement the strategy of innovation-driven development and advance capital market reforms, the establishment of the new board bears great significance for supporting science and technology innovation, advancing supply-side structural reform and fostering sustainable and sound economic growth in China.
“The innovation board, as a newborn, has great potential and vast prospects, while it can also confront various challenges,” Yi said at the launch ceremony.
Chinese Vice Premier Liu He said the two priorities for the establishment of the board are registration-based IPO reform with information disclosure at its center, and enhancing the rule of law by raising the cost of violations and strengthening supervision and law enforcement.
“Under the registration-based system, the power of selection lies with the market,” Liu added.
Huang Hongyuan, chairman of Shanghai Stock Exchange, said the first group of technology companies are expected to go public on the STAR Market within two months. The delisting system for the new board will uphold strict regulatory standards, Huang said.
Myron Scholes, 1997 Nobel laureate in economic sciences, said: “I think it very important with the idea being able to support the technology sector in China that you have a chance to have financing for these younger companies.
“This allows them to grow more quickly and add capital more quickly, which gives them a chance to innovate more and grow more.”
Yan Hong, deputy dean of the Shanghai Advanced Institute of Finance at Shanghai Jiao Tong University, said: “The launch of the STAR Market is exciting as the new board will definitely fuel economic growth.
“It will allow innovative companies in science and technology to raise funds directly from the capital market even if they have not really made profits but have a bright prospect in the future.”
Yan added: “This new market also represents a milestone in the capital market development of China with the implementation of the registration system.
“Using the registration system requires very strict information disclosure.
“This allows investors to have sufficient information to access and then to price according to their understanding of the information. This will return pricing power to the market.”
