The business rules for the National Small and Medium-sized Enterprise (SME) Share Transfer System, the new third board, were unveiled on 8 February 2013 following the China Securities Regulatory Commission’s promulgation of the Measures Governing the Supervision of Non-listed Public Companies last year. Under the new rules: companies applying for a listing on the new third board are extended to include non-high-tech companies; there are no restrictions on corporate
ownership; the number of shareholders of a non-listed public company can be over 200; and each lot size can be split into 1,000 shares as a starting point for trading. Market makers are also introduced, investment is opened to natural persons, and licensed companies can make secondary offerings or private placements.
The table below describes the main features of the new third board by comparison:
The new third board is now only extended to include those companies in the high-tech parks in Zhongguancun of Beijing, Zhangjiang of Shanghai, East Lake of Wuhan and Binhai of Tianjin. It is anticipated that the pilot scheme may soon be extended nationally. To implement a board switching mechanism for the new third board, the CSRC and the stock exchanges will also revamp various systems like the system for initial secondary offerings in accordance with the Securities Law and other regulations.
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