The new stock-trading venue in Shanghai Stock Exchange is a "very good attempt" to optimizing the multi-tiered capital market system and enhancing the capital market's capability to serve the real economy in China, American experts said.
The science and technology innovation board, which pilots registration-based initial public offering (IPO) system, is "a very good attempt," and "it may be adopted by A-share markets in the future," said Henry Huang, professor with Sy Syms School of Business, Yeshiva University.
"If high-tech companies grow and expand in the sci-tech innovation board, maybe they will get listed in the A-share markets later to attract more qualified investors, which makes the sci-tech innovation board an incubator of quality enterprises," Huang said.
Kevin Chen, chief economist with U.S. wealth management firm Horizon Financial, agreed.
The new board will "largely improve" financing environment for high-tech companies, thereby accelerating the progress of sci-tech innovation in China as a whole, he said.
The adoption of registration-based IPO system will "make shell companies meaningless, while real values of listed companies will be shown in their share prices through more appropriate supervision mechanism," Chen said.
In addition, the new major reform will facilitate Shanghai's transformation into an international financial center as well as a science and technology innovation hub, said Allen Tjiong, president and CEO of BOC International (USA) Inc.
"These reforms are essential in making Shanghai a more competitive and attractive capital market for technology companies to raise capital," said Tjiong.
China's top securities regulator on Friday released regulations on the science and technology innovation board, which pilots registration-based IPO system. The regulations took effect on March 1 on a trial basis, according to the China Securities Regulatory Commission (CSRC).
The new stock-trading venue focuses on companies in high-tech and strategically emerging sectors such as new generation information technology, advanced equipment, new materials and energy, environmental protection, and biomedicine, according to the CSRC.
Under the pilot registration system, eligible companies can become listed by filing required documents. Currently, new shares of the A-share markets are subject to approval from the securities watchdog.
