ChiNext Board to Ease Restrictions on Backdoor Listings
Du Qingqing | Yuan Ziyi
DATE:  Jun 21 2019
/ SOURCE:  yicai
ChiNext Board to Ease Restrictions on Backdoor Listings ChiNext Board to Ease Restrictions on Backdoor Listings

(Yicai Global) June 21 -- Chinese securities regulators plan to relax limitations on mergers and acquisitions on Shenzhen's ChiNext board for growth enterprises, paving the way for backdoor listings in order to revitalize the market.

The China Securities Regulatory Commission proposed several measures to relax the rules in a statement released yesterday, several of which offer support to high-tech and strategic emerging industries.

The watchdog previously allowed only companies listed on the main and over-the-counter boards in Shenzhen and Shanghai to be used as vehicles for backdoor listings given the risky nature of the procedure and the low market caps of ChiNext companies -- which it deemed easy targets for speculation.

It is a different environment now, an industry insider told Yicai Global. Registrations for Shanghai's new sci-tech innovation board will curb hype over backdoor listings, he added.

The ChiNext debuted in 2009 and has over 763 companies listed and a market cap of more than CNY5 trillion (USD729.8 billion). Only 268 of the firms have a cap of less than CNY3 billion (USD437 million) -- which are the most likely to be targeted for backdoor listings given their lower value.

Editors: Dou Shicong, James Boynton

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Keywords:   ChiNext,Backdoor Listings