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China publishes final rules for new Nasdaq-style tech board

Key Points
  • If successful, it could raise Shanghai's profile as a capital-raising competitor to Hong Kong and New York.
  • China has long wanted its tech champions to list closer to home, but many of the best-known Chinese technology firms, including Alibaba Group and Tencent Holdings, chose to raise funds in international markets.
  • New York and Hong Kong accounted for nearly 70 percent of the money raised through Chinese IPOs last year.
An investor watches the electronic board at a stock exchange hall on Feb. 11, 2019 in China.
Visual China Group | Getty Images

China has finalized regulations for a Nasdaq-style innovation board that promises to smooth the way for Chinese technology IPOs and, if successful, could raise Shanghai's profile as a capital-raising competitor to Hong Kong and New York.

The stock market regulator late on Friday published the rules for the tech board after considering opinions from the public on draft regulations that were introduced on Jan. 30.

They took effect immediately. 

Listings on the new board will be done according to a registration system that limits official powers to control the timing of IPOs. In addition, some companies that are not yet profitable will be allowed to go public.

Those provisions alleviate two major impediments to companies seeking to tap existing equity capital markets in China.

China has long wanted its tech champions to list closer to home, but many of the best-known Chinese technology firms, including Alibaba Group and Tencent Holdings, chose to raise funds in international markets.

New York and Hong Kong accounted for nearly 70 percent of the money raised through Chinese IPOs last year.

In another sign plans for the new board are progressing, the financial news website Caixin reported that the Shanghai Stock Exchange had completed recruiting employees for the board and they were slated to start work in mid-March.