On November 29, the China Securities Regulatory Commission stated that it is necessary to actively guide and support the establishment of a special technological innovation board for the Shanghai Equity Exchange, to provide an interface with the STAR Market. The State Council states that this is a classic case of comprehensive innovation and reform, requiring its own planning, designation, and direction – so, as the STAR market enters 2020, the Q Board is born.
According to Zhang Yunfeng (张云峰), the general manager of the Shanghai Equity Exchange ,"The science and technology Q board requires a certain size for the companies who want to be listed and needs them to meet the requirements of the STAR Market. The ‘Q Board’ does not make mandatory requirements for the standardization of enterprises and the reform of the shareholding system, and the level of detail required for the disclosure of enterprises is far lower than the original STAR Market. This is a new capital market segment, launched in conjunction with the actual situation of the companies which plan to be listed on the STAR Market.
The 'Q Board' will gather local governments, financial institutions, investment institutions, etc. to provide listed companies with comprehensive listing counseling services, accelerate the incubation of science and technology enterprises and provide a reliable source of ventures for the STAR Market.
Since this Q Board will provide a continuous reserve of listed resources and will play an active role, it needs to move closer to the core STAR Market management system.
As a result, there will be two major characteristics of this Q Board. One is to be registration-based; the other is that the system of listing conditions and regulatory requirements should be highly compatible with the STAR Board.
The CSRC's agreement with Shanghai Equity Exchange to carry out the docking with the STAR Market is the embodiment of the innovation pilot. The development of scientific and technological innovation allows more enterprises to benefit from the capital market.
Generally speaking, this is an innovation for the Chinese capital markets. With limited information about the 'Q Board', we see that it's similar to the financial advisory service institutions. The business includes equity financing, mergers and acquisitions, direct investment, securities underwriting and issuance, securities sales, trading and brokerage, research, structured products, and other services. It is committed to providing one-stop financial services for entrepreneurs and investors in the Chinese new economy.
Notwithstanding that it has not been applied in practice, from a long-term perspective it's expected to improve the standardization of the capital market.