Preparations for Second Board in Final Stage: CSSCChina will place more emphasis on the securities market in meeting capital need of the new economy, with more financial products to be introduced and more advanced technology employed, said Zhou Xiaochuan, chairman of the China Securities Supervisory Commission (CSSC).Preparations for launch of the second board of China's stock market will enter the final stage soon, he said Friday at a high-tech seminar at the second China High-Tech Fair in Shenzhen. Technical part of the preparations, which covers the trading system, human resources, education of intermediaries and investors, is expected to be wrapped up by the end of this month. Assessment of related regulations, is being ``actively'' pushed forward at the State Council and will enter the final stage soon. With the development of riskier high-tech industry, China's monetary authorities have decided to broaden direct fund-raising channels, instead of relying on traditional means, which may result in more bad assets in banks, Zhou said. Instead of overstressing stableness in the financial sector, authorities will take an active approach in introducing new financial products. Open mutual fund is expected to be launched soon. New technology applications, such as online IPOs and e-roadshows, bring low-cost and convenience, which is important for small and medium-sized enterprises, and are positive experiment in meeting the Internet age and new economy, he said. On the other hand, authorities will take stricter measures against illegal activities. Companies to be listed on the second board will be required to release results on quarterly basis. Sponsorship will be introduced for the second board to ensure quality of IPOs. Stock exchanges of Shenzhen and Shanghai have been developing simutaneous supervisory systems, Zhou said. On the possible flow of capital from the mainboard to the second board, Zhou said he has strong confidence in the capacity of the mainboard in withstanding the challenge given its large size. The Shenzhen stock exchange has completed the drafting of rules for the market of the second board, said an insider. Technical preparation, personnel recruitment and office decoration for the second board was ready for a launch in Shenzhen, said Zhang Ying, vice manager of Shenzhen stock exchange yesterday. He didn't confirm whether the venue for the second board had been determined between Shenzhen and Shanghai. The second board market would become China's first to open to foreign investors, Zhang told at the WorldCN 2000 World Securities Market Summit. The rules will also require that two independent directors be selected by applicant company's shareholders general meeting, who will advise on corporate issues of significance in the interests of shareholders. Another speaker, Liu Xiaodong, vice manager of Shanghai stock exchange warned not every high-tech company was suitable for listing on the second board. He said high-tech companies were ``also welcomed at the main board,'' in which most firms are large state-owned enterprises. |
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