China Securities Regulatory Commission approves merger of Shenzhen exchange’s main board, SME board
- The move is aimed at simplifying the structure of trading at the bourse, regulator says
- Shenzhen main board’s listing and trading rules will remain unchanged after the merger
“The merger will optimise the trading structure of Shenzhen Stock Exchange,” the regulator said in a statement. “The main board and the ChiNext will each have their own focus and complement each other [after the merger].”
Friday’s restructuring is an important part of reforms in China’s capital markets, the regulator said. Calls for the merger have grown over the past year, after Beijing launched the Nasdaq-style Star Market at the Shanghai Stock Exchange. The SME board’s role had already been reduced with the creation of the ChiNext market for start-up firms in 2009.
“The SME board has been losing its lustre because it is no longer a choice for mainland technology firms when they consider initial public offerings,” said Yin Ran, a Shanghai-based angel investor. “The regulator has taken its time in making this decision. Some regulatory and industry officials had proposed the merger a long time ago.”
The regulator said the Shenzhen main board’s listing and trading rules will remain unchanged after the merger. As of Friday, the SME board was home to 1,001 companies with a total market capitalisation of 13.7 trillion yuan (US$2.1 trillion), while 468 companies traded on the main board and were valued at 9.7 trillion yuan on aggregate.
