China to step up supervision of Nasdaq-style Star Market
China’s securities regulator plans to step up oversight on companies listed on the Star Market, the country’s Nasdaq-style tech board, as part of reform measures to contain market volatility. The China Securities Regulatory Commission said Wednesday that it will enhance oversight on all companies listed on the Shanghai Science and Technology Board, or the Star Market, under the Shanghai Stock Exchange. The regulator said it will prioritize supporting companies with innovative and cutting-edge technologies in listing on the board.
The CSRC acknowledged that some tech companies are yet to be profitable due to significant expenses on research and development, and said it will leave the door open for companies that fit within President Xi Jinping’s “new productive forces" framework to go public. The regulator also said it will increase support for mergers and acquisitions for companies that are listed on the tech board and encourage companies to consolidate within their supply chain. The new measures were released after CSRC Chairman Wu Qing signaled the reforms to come during his keynote speech at the annual Lujiazui financial forum early Wednesday in Shanghai.
The CSRC’s recent measures have focused on containing capital-markets volatility after Wu became head of the regulator in February. China’s stock markets have faced significant volatility since the start of the year. Wu was appointed to his role shortly after the benchmark Shanghai Composite Index fell below the key 2800 level in January.
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