CSRC to release plan for expanded OTC mart

The complete implementation plan involving the expansion of an over-the-counter equity transaction system nationwide is expected to be released at the earliest on Friday, a securities companies' leader said, broadening financial channels for unlisted small-scale enterprises.

A training session for brokerages to introduce the technology and the operation system of the national over-the-counter equity platform, or the "new board", was held in Beijing on Thursday.

Li Xudong, executive general manager of China Securities Co Ltd, was quoted by the newspaper Securities Daily as saying that Vice-Chairman of the China Securities Regulatory Commission Yao Gang would give a speech at the training session to release information about the plan.

"After the training, the new board expansion plan will be published soon," Li said.

On Thursday, the commission didn't post the speech of its vice-chairman or give any information about the plan.

Yang Xiaojia, chairman of the board at the National Equities Exchange and Quotations, the national management company of the over-the-counter equity platform, said last week that "conditions are ready for expanding the medium and small enterprise equity transaction pilot program nationwide".

According to Yang, the board expansion plan will introduce detailed regulations about equity issuance and transaction mechanisms.

"More kinds of financial instruments will be traded within the system, such as preferred stocks, privately raised company bonds and convertible bonds," she said.

On June 19, a State Council executive meeting decided to expand the over-the-counter equity market to the whole country.

Currently, only unlisted enterprises from four high-tech industrial parks that are in Beijing, Shanghai, Tianjin and Hubei can trade equities on the pilot platform.

By Thursday, 344 medium and small companies had listed on the national over-the-counter equities transaction board. The total transaction value has reached more than 500 million yuan this year.

On the new board, 77 securities companies received the qualification to issue and underwrite equities for the unlisted enterprises.

Research by Huatai Securities predicted that in the next five years the number of companies on the over-the-counter board is expected to exceed 4,000, with a total market value of more than 1 trillion yuan.

The new board will become an important part of China's multi-level capital market then, it said.

Sun Lijian, deputy director of the School of Economics at Fudan University in Shanghai, said the policy design of the new board should provide convenience for small-scale businesses to raise funds in the capital market and reduce financing costs.

The over-the-counter equity transaction system will provide another entrance to the capital market besides initial public offerings, he said.

The commission has suspended IPO issuances for more than a year. By the end of last week, 181 companies were on the IPO waiting list at the Shanghai Stock Exchange and 577 were waiting in Shenzhen.