On 28 January 2020, the China Securities Regulatory Commission released the Implementing Opinions for the Establishment of the Shanghai Stock Exchange’s Innovation Board (Announcement  No. 2). The Opinions will form the main basis on which relevant authorities will push forward work in the upcoming weeks.
The innovation board will mainly support SMEs operating in the key strategic and emerging fields such as new generation ICT, high-end equipment, new materials, new energy, clean technologies, and biopharmaceuticals; and will contribute to a deeper integration of the internet, big data, cloud computing and artificial intelligence with the manufacturing industry. The main characteristic of the innovation board will be pilot IPO registration system featuring diversified and at the same time relaxed rules for innovative start-ups. For instance, start-ups which still have not generated profits or with accumulated uncovered losses will be allowed to get listed (currently such start-ups are barred from main stock bourses).
The Opinions indicate five main areas on which particular efforts will be focused:
- Establishment of market-oriented issuance and underwriting mechanisms
- Enhancement of information disclosure management and supervision
- Establishment of increasingly market-oriented transaction mechanisms, based on the needs and requests of listed companies and investors
- Establishment of more effective merger, acquisition and restructuring mechanisms
- Rigorous enforcement of delisting mechanisms
Detailed guidelines for listing requirements and trading rules were published on 30 January on the website of the Shanghai Stock Exchange for public opinions.