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 | Saturday, April 22, 2000, updated at 12:04(GMT+8) | ||||||||||||
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Regulators Draft Laws for Second BoardSenior officials of China's securities regulatory body said they will create favorable market conditions for the development of the "new economy'' by adjusting the structure of the stock market, during the China Business Summit last week.The adjustment is expected to be achieved mainly with the establishment of a second board for technology issues, said Gao Xiqing, vice-chairman of the China Securities Regulatory Commission (CSRC). The second-board will help attract more participants to the stock market, he said. Commission Chairman Zhou Xiaochuan said the second-board will be opened immediately after preparations for legislation and technical arrangements are completed. The second-board would have less-stringent entry requirements than the existing market, but would have tougher disclosure rules than the main board. Second-board markets are especially helpful for high and new-technology companies. These companies are usually desperate for capital in their initial stages of development. But most of them are not big or profitable enough to raise funds by listing on main boards. Gao said the CSRC supports all enterprises that are acceptable to the stock market. The commission last year abandoned a quota system that limited the number of listed companies. Till now, more than 900 Chinese enterprises have gone public on the A-share or B-share markets in Shanghai and Shenzhen. Gao said the commission would continue to encourage domestic companies to get listed on overseas capital markets. More than 40 mainland companies have been on the Hong Kong stock exchange or on foreign bourses in New York, London or Tokyo. A few companies in the information technology sector, including the Internet company Sina.com went public on Wall Street's NASDAQ market and Hong Kong's Growth Enterprise Market. "We will help mainland companies increase their fund-raising volumes in these markets,'' Gao said. He said CSRC would also take measures to encourage listed companies to practice better corporate governance. One step would require the listed companies to increase their disclosures of information. They would be required to provide more information in their disclosures and to make them more frequently. Gao also said the country would open its market to foreign securities companies in a gradual manner.
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