China unveils disclosure rules for second board IPOs

July 6, 2009

    SHANGHAI, July 6 (Reuters) – China published draft rules on information disclosure by companies aiming for an initial public offering on Shenzhen’s second board, as the country nears the launch of its own Nasdaq-style market to fund start-up firms.
   The China Securities Regulatory Commission posted the draft rules on its website over the weekend seeking public opinions until July 17. The rules state what type of information companies should provide in their IPO prospectus and in what format.
   “Regulators have published strict rules in the hope that the new market will start smoothly,” said Jiang Jianrong, analyst at Shenyin Wanguo Securities Co. “We may see the first IPO on the second board as soon as in October.”
   China last month lifted a nine-month ban on IPOs on its main board and finalised regulations related to Shenzhen’s second board, as the stock market rebounded from a slump last year on ample liquidity and signs of economic recovery.
   Once the disclosure rules are officially published after consultations, brokerages can start submitting IPO applications to regulators, Xue Rongnian, president of Ping An Securities Co told Reuters. China may see the first batch of companies listed on the second board in the fourth quarter, he added.
   Launching the second board can help China upgrade its technology, promote the development of small- and medium-sized enterprises and aid the country’s economy, Song Liping, general manager of the Shenzhen Stock Exchange, said in a speech posted on the exchange’s website. (US$1=6.832 Yuan)

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