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Wan LixinOpinion deputy editor of Shanghai Daily
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GEM account regulations announced
By Winny Wang |
July 2, 2009, Thursday
|
Online Edition
Online Edition
INVESTORS can apply to open accounts to trade stocks on the growth enterprise market on July 15, another step towards introducing the long-anticipated Nasdaq-patterned financing platform.
China's securities regulator issued the threshold for investors on Wednesday. Investors who have traded stocks for more than two years need to sign an agreement with the brokerage that they are aware of the risks on the new board for start-up firms.
Other investors will be required to write a special notice to indicate that they are willing to undertake risks, according to a statement to the Shenzhen Stock Exchange. The rules will take effect on July 15.
High risks exist in the GEM, which is not suitable for all investors, so brokerages must clearly be aware of investors' identifications, assets and income conditions, the China Securities Regulatory Commission said.
"I will buy shares in the growth enterprise market as high risks can generate high returns, but the threshold for investors is too low," said one individual investor surnamed Lu, who has traded stocks for a decade.
"The regulator should restrict investors who have traded stocks for less than five years and own assets less than 1 million yuan from opening accounts with the new board," he said.
Companies can list on the GEM with annual net profits of at least 10 million yuan in the previous two years, or 5 million yuan for one year with sales of at least 50 million yuan.
In contrast, companies on the main board must have net profits of at least 30 million yuan in the previous three years or total sales above 300 million yuan.
Companies on the GEM will face stricter disclosure requirements and limits on stock sales than those on the main boards at the Shanghai and Shenzhen bourses.
Yao Gang, vice chairman of the CSRC, hinted earlier that the GEM will be launched after August.
China's securities regulator issued the threshold for investors on Wednesday. Investors who have traded stocks for more than two years need to sign an agreement with the brokerage that they are aware of the risks on the new board for start-up firms.
Other investors will be required to write a special notice to indicate that they are willing to undertake risks, according to a statement to the Shenzhen Stock Exchange. The rules will take effect on July 15.
High risks exist in the GEM, which is not suitable for all investors, so brokerages must clearly be aware of investors' identifications, assets and income conditions, the China Securities Regulatory Commission said.
"I will buy shares in the growth enterprise market as high risks can generate high returns, but the threshold for investors is too low," said one individual investor surnamed Lu, who has traded stocks for a decade.
"The regulator should restrict investors who have traded stocks for less than five years and own assets less than 1 million yuan from opening accounts with the new board," he said.
Companies can list on the GEM with annual net profits of at least 10 million yuan in the previous two years, or 5 million yuan for one year with sales of at least 50 million yuan.
In contrast, companies on the main board must have net profits of at least 30 million yuan in the previous three years or total sales above 300 million yuan.
Companies on the GEM will face stricter disclosure requirements and limits on stock sales than those on the main boards at the Shanghai and Shenzhen bourses.
Yao Gang, vice chairman of the CSRC, hinted earlier that the GEM will be launched after August.
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