The Science and Technology Innovation Board (referred to as the Star Market) has officially been launched by the Shanghai Stock Exchange. A lawyer who was involved in the first application for listing says enterprises that wish to list on the Nasdaq-style market should pay attention to their scientific and technological innovation attributes and information disclosure.
The idea for the Star Market was first raised in November last year, and after a short period of about 200 days, it became an official reality on 13 June. The official opening of the market is also not far off.
The first batch of companies that received China Securities Regulatory Commission (CSRC) approval, Chipscreen, Anji Technology and TZTEK, submitted their registration applications on 11 June and additionally updated the registered drafts of their prospectuses, marking the official start of the Star Market’s offering registration procedure.
As of 13 June, six enterprises had received CSRC approval, the three mentioned plus RICOM, HYC Technology and Raytron Technology.
With the assistance of Llinks Law Offices, Shenzhen Chipscreen Biosciences was the first enterprise to submit an application to the CSRC for a listing on the Star Market. Chen Jun, a Beijing-based partner at Llinks Law Offices, is one of the key lawyers involved in Chipscreen’s listing project.
Chen said that the Star Market, as a new independent board that is trying the registration system on a pilot basis, is an experiment in reform that differs substantially from existing securities boards in terms of its overall system design, listing conditions, information disclosure, mode of review, etc.
Chen said that enterprises that intended to list on the Star Market need to pay particular attention to two points. “The first is to do detailed fact finding on their scientific and technological innovation attribute. In addition to high-tech industries and strategic emerging industries, such as new generation information technologies, high-end equipment, new materials, alternate energies, energy conservation/environmental protection and biopharmaceuticals, which are provided with key support, leading enterprises in other industries that have key core technologies and outstanding science and technology innovation capabilities also satisfy the Star Market’s scientific and technological innovation attribute, but in order to evidence the enterprise’s own scientific and technological innovation attributes, more measurable and visual evidence is required in support.
“The second point is to place significant weight on the enterprise’s compliant operations and information disclosure, with the registration system placing greater emphasis on the sufficiency, consistency and understandability of information disclosure. Accordingly, an enterprise, while keeping a close eye on the compliance of its operation, is also required to pay close attention to the quality of its information disclosure, which, to a great extent, can influence the speed at which its review progresses, and even whether it is successful in achieving a listing.”
In the course of Chipscreen’s listing project, the team of Llinks’ lawyers was required, within a short period of time, to do an in-depth and detailed study of the Star Market-related laws, regulation, rules, and the Answers to Questions on Reviews, assist the enterprise in formulating a listing plan, revise its articles of association and other internal system documents on the basis of the new rules, and, in light of the new requirements, carry out due diligence, prepare the working papers and issue legal opinions and lawyers’ work reports.
“Within about two weeks after officially submitting the listing application by way of the Shanghai Stock Exchange’s Star Market online review system, we received the first round of the Shanghai Stock Exchange’s written feedback, with the feedback questions professional, detailed and comprehensive,” said Chen. “We had to split up the work and co-ordinate with the other intermediary firms to address the feedback questions and give a targeted response within a limited period of time.”