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Draft rules for GEB trading released

By Bi Xiaoning (China Daily)
Updated: 2009-05-09 07:44

The Shenzhen Stock Exchange on Friday released the draft trading regulations for China's NASDAQ-like second board, or growth enterprise board (GEB), and has also started eliciting public opinion on the same.

The regulations have more or less specified the requirements on information disclosure, lockup period for shareholders, delisting and also highlighted the supervision on corporate governance and internal control.

"The regulations strengthen the information disclosure on the first trading day to avoid over-speculation and also has more strict requirements than the main board for delisting, all aimed at making the market more efficient," said Zhou Ming, vice-president, Shenzhen Stock Exchange.

"After the companies get listed, the venture capital firms will still need to wait for at least one year to get some investment returns. We hope the period can be shortened to six months," said Zero2IPO CEO Ni Zhengdong.

"To some extent, the longer lock-up period can make the founders and venture capital companies pay more attention to the long-term development of the companies. We welcome the upcoming GEB as it offers a convenient channel for venture capital companies and private equity firms," Ni added.

For strengthening the corporate governance of listed companies, the draft for the first time introduced the accumulated voting system for selecting independent directors, which can give more chances for minority shareholders to join the companies' decision process.