New regulations pertaining to China's New Third Board are expected to be issued in the coming months by the country's securities regulator, the China Securities Journal (CSJ) reported Wednesday, citing insiders close to the experimental over-the-counter (OTC) market.
Specifically, regulators are expected to first launch criteria outlining information disclosure policies for companies trading on the OTC market, followed by market entry qualifications for investors, with rules related to market makers to be unveiled afterwards, the CSJ's sources explained.
Among the few details regarding the regulations reportedly offered by the insiders, individual investors will likely be required to have held stock trading accounts for more than two years and possess more than 3 million yuan ($482,160) in investment capital, well above the 500,000 yuan entry minimum previously expected by the market. A system to manage and regulate market makers was said to be in the works for 2014 in order to give participating traders time to prepare.
The New Third Board was originally established in 2006 as a platform to provide funding to China's small but promising non-listed high-tech companies operating in Beijing's Zhongguancun Park. The market has grown quickly in recent months under policies from regulators.
Currently, there are 200 companies traded on the New Third Board, up from 97 at the end of 2011, according to data available on the website of the Shenzhen Securities Information Co (SSI), an official information disclosure site designated by the securities regulator.
Transaction volume on the New Third Board reached a combined 584.32 million yuan in 2012, up from the 560.28 million yuan total seen for 2011, SSI data show.
"Turnover at the OTC market will increase as it expands and investors have more choices," Li Bo, an analyst from GF Securities, told the Global Times.
Li also noted that the New Third Board is unlikely to divert capital from the country's A-share markets in the near term.
"Basically, the target investors for each market are different - A-share markets are dominated by small retail investors while OTC markets will attract professional and institutional investors," Li explained.
Feedback
RSS
