Rules show BSE set to debut on Nov 15

The much-anticipated Beijing Stock Exchange is likely to commence trading on Nov 15 as 10 sets of business and supporting regulations were released on Saturday, said experts.

The BSE is seen as a game-changer for technologically advanced small and medium-sized enterprises, or SMEs, they said.

On Saturday, the new bourse released four sets of business regulations on its website. They concern stock listings, revisions, issuances for unspecific qualified investors and company restructuring.

Another six supporting sets of regulations were released as well, covering management of sponsors, underwriters, issuance of preferred stocks and convertible bonds.

All the 10 sets of regulations will take effect on Nov 15. This appears to suggest the BSE will commence its formal operations on Nov 15, industry insiders said.

The new exchange will initially be built upon the NEEQ Select, the highest tier of the eight-year-old National Equities Exchange and Quotations system.

Draft listing rules were released on Sept 5 to solicit public opinion. In the revised version released on Saturday, the BSE said companies will not be allowed to go public if they have not released annual or interim reports 36 months before the listing applications.

Sponsors' supervision period over companies' initial public offerings and restructuring is set at three years and two years, respectively. Companies' stock incentive plans implemented at the NEEQ can be resumed after listing on the BSE. Meanwhile, a moderately tighter grip will be taken over BSE-listed companies' auditing reports.

In an announcement on Saturday, the China Securities Regulatory Commission, the country's top securities watchdog, said the rules and regulations have fully demonstrated the BSE's inclusiveness, flexibility and its special positioning.

The new bourse should take the lead and strengthen its bond with the NEEQ in order to boost market entities' vitality, better serve innovative SMEs and facilitate the country's high-quality economic development, the CSRC said.

As of Sunday, there were 68 NEEQ Select companies, which will be directly transferred to the BSE.Meanwhile, there are another 14 companies that may complete subscription to the NEEQ Select before Nov 15.

In all, there may be 82 listed companies when the BSE debuts in the middle of this month, said Zhou Yunnan, founder of Beijing Nanshan Jingshi Investment.

Of them, 75 have reported financial results for the past three quarters, while 68 percent have reported net profit growth.

A-share companies with businesses related to the BSE reported an average daily surge of 2.87 percent on Monday, while the benchmark Shanghai Composite Index slid a marginal 0.08 percent.

Dong Qi, chief analyst of Guotai Junan Securities, said the registration-based IPO system and the corporate system will be further optimized after the launch of the Beijing bourse, which, in the long run, will be translated into more diversified services available in the Chinese capital market.

While SMEs may promise less management stability, the BSE may help finesse the country's delisting system, given its strong connection with the NEEQ, said Dong.