To Establish the Second Board---the Sooner the Better: Li Yining


To Establish the Second Board---the Sooner the Better
Time is mature for setting up the second board---the sooner the better, said the noted economist Li Yining in his public report when he attended the inauguration of Golden Bull Securities Co. Friday in Shenzhen.

There are a lot of arguments concerning the second board, said Li Yining. However, some basic requirements have to be met. The most important thing is to use foreign experiences earnestly, he said.

According to Li, to establish the second board, a few basic requirements must be satisfied. Shares must be wholly tradable; no daily trading limits are introduced; share option system should be introduced; high transparency; and fully disclosing of information. All these requirements should be reflected in the listing rules for growth enterprises to be released in the future, he said.

He said China should draw on the successful experiences form foreign countries when launching the second board. Apart from hi-technology, consideration should also be given to growth prospects. Secondly, preparation must be made to select the market leads. A market without leads will not able to take shape. Thirdly, the firstly listed enterprises should have considerable scale. With too few listed firms and too little market capitalization, they may fall an easy prey to speculation, which hinders the development of the market. Lastly, the government must set out the rule of game and make improvement continuously. Violators of the rule must be penalized. However, government should not interfere with the market.









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