Shanghai's New Technology Board Gets off to a Strong Start

Since it was first officially announced last November by President Xi Jinping, Shanghai's new Science and Technology Innovation Board, or Sci-Tech Board, has made rapid progress. The China Securities Regulatory Commission, or CSRC, and the Shanghai Stock Exchange, or SSE, implemented new rules for its governance in the first week of March this year. By April 2, the SSE announced that it had already accepted 37 companies' applications for listing, and these companies will now go on to the second stage of audit and inquiry before they can successfully be listed on the Sci-Tech Board.

A main purpose of the new board is to provide a much needed source of local finance to help new innovative companies develop, without resorting to listing overseas. China has some of the world's biggest technology companies, but many are listed in the U.S. and Hong Kong. To attract companies to the new board, it has relaxed rules on listing and trading, moves that may also be extended to other exchanges, according to a Bloomberg report. It will also speed up the listing process. China currently uses an approval-based system for initial public offerings, or IPOs, which can take many months or years to complete.