On September 2, China announced that it would set up the Beijing Stock Exchange to create a main position for service-innovative small and medium-sized enterprises.

This is another "highlight" of the high-quality development of China's capital market, and it is bound to draw a new chapter in serving the real economy.

  After the establishment of the Beijing Stock Exchange, a new pattern of securities markets with complementary functions, distinctive features, and obvious advantages of the Beijing, Shanghai, and Shenzhen exchanges will be formed, which is conducive to further improving the capital market that serves the financing needs of enterprises at different levels and stages of development. Infrastructure to enhance the inclusiveness and inclusiveness of the capital market.

  From an international perspective, the establishment of the Beijing Stock Exchange can not only promote the interconnection of capital markets, strengthen the development of the "Belt and Road", promote economic and trade development, and common prosperity, but also provide innovative institutional arrangements and designs for the return of China's concept stocks.

  The establishment of the Beijing Stock Exchange is conducive to "filling up the shortcomings" on the macro level, "adding new faces" in the market, and the healthy development of innovative small and medium-sized enterprises. The assets of ordinary investors increase in value, and it will contribute to the formation of a good coupling between the financial market and the real economy. .

  First of all, SMEs will have new direct financing channels, which will help stabilize the growth rate of social financing scale and help China's economy "stabilize and achieve long-term".

It also helps to improve the quality of corporate information disclosure, reduce legal and financial risks, and promote the modernization, standardization and transparency of corporate governance.

At the same time, it is conducive to guiding investors to participate more in the development of "specialized, special and new" innovative small and medium-sized enterprises, increase residents' property income, and achieve common prosperity.

  The establishment of the Beijing Stock Exchange is also conducive to improving the market liquidity of startups and enriching the exit channels for private equity funds.

At present, due to the overall lack of liquidity in the NEEQ market, a large number of listed companies choose to delist.

Most of the private equity fund investment companies are start-up companies, and some start-up companies have not made profits, and the valuation is difficult, resulting in the low efficiency and low returns of private equity funds through equity withdrawal.

The establishment of the Beijing Stock Exchange to activate the trading volume of the NEEQ will further improve the development environment of private equity funds' "funding, investment, management and retreat", facilitate private equity institutions to use the NEEQ open market to complete exit, optimize the allocation of financial resources, and promote the survival of the fittest by listed companies.

  On September 5, the Beijing Stock Exchange issued three sets of trial rules (draft for comments), including stock listing rules, and made corresponding adjustments to the positioning of serving small and medium-sized enterprises based on the continuation of the original selection system.

In the long run, the Beijing Stock Exchange can introduce supporting measures from the following aspects to strengthen its role in serving small and medium-sized enterprises and supporting the real economy:

  The first is to strengthen the positioning of the Beijing Stock Exchange to serve innovative small and medium-sized enterprises, fully consider the development process and characteristics of small and medium-sized enterprises in terms of access standards and regulatory rules, and optimize and adjust them on the basis of the existing system.

  The second is to optimize the issuance mechanism and reduce the issuance cost of SMEs.

In order to achieve a smooth transition, the current CBEX issuance mechanism basically continues the pattern of “gradual progress” between the basic layer, innovation layer and the selection layer of the Beijing Stock Exchange, and simultaneously pilots the registration system for securities issuance.

In the future, on this basis, the issuance and listing system suitable for the characteristics of small and medium-sized enterprises can be improved, such as optimizing the targeted issuance mechanism.

  The third is to improve the trading system and further improve the efficiency and liquidity of market transactions.

At present, the Beijing Stock Exchange also implements the T+1 trading mechanism. In the future, the Beijing Stock Exchange may be considered as a "test ground" for the T+0 system to accumulate experience for the reform of the Shanghai and Shenzhen Stock Exchanges.

  The fourth is to improve the system design of the basic layer and the innovation layer.

At present, the design of the relevant system is not perfect, and there are shortcomings such as low transaction efficiency and few issuance methods. In the future, it may be considered to introduce a public issuance system and implement a continuous bidding mechanism.

  The fifth is to enrich the types of investors and lower the entry barriers for investment.

Currently, the Beijing Stock Exchange still continues the entry threshold of 1 million yuan for investors in the select-tier market, which is higher than the investment entry threshold of 500,000 yuan for the Science and Technology Innovation Board.

In the future, as the number of listed companies increases and market liquidity improves, appropriate consideration may be given to lowering the entry threshold for investors in order to broaden corporate financing channels.

  Text/Zhong Zhengsheng

  China News Weekly, Issue 33, 2021

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