New rules for OTC expected in March
By Lydia Chen |
January 20, 2011, Thursday
|
Print Edition
Print Edition
NEW rules to expand China's burgeoning over-the-counter board are expected to be launched in March and they will include introducing market makers and allowing individual investors to access the "third market."
The rules will probably be announced after the annual National People's Congress meeting on March 5, the China Securities Journal reported yesterday.
Individual investors will be allowed to trade a minimum volume of 1,000 shares each time under the new rules rather than the current requirement of 30,000 shares. In the OTC board, investors can only trade blocks of securities directly, rather than through an exchange, providing liquidity and anonymity to buyers
But the authorities have not decided what type of brokerages can trade in the OTC market, the newspaper said.
A total of 43 brokerages across the country have so far won approval to trade OTC, according to a statement by the Securities Association of China on Tuesday.
China launched its first OTC market in June 2001 in Beijing to accommodate stocks de-listed from the Shanghai and Shenzhen bourses as well as stocks formerly listed on the Securities Trading Automated Quotations system and National Electronic Trading system.
STAQ and NET, set up in the 1990s for firms that could not meet main-board listing terms, were closed in 1999 because of rampant irregularities. In 2006, the Beijing-based OTC board was turned into a market where technology firms in Beijing's Zhongguancun Technology Park could trade shares.
In July last year, Shanghai set up its OTC market in Zhangjiang Hi-Tech Park in Pudong New Area to help start-up firms in the city and in the Yangtze River Delta region raise money.
The rules will probably be announced after the annual National People's Congress meeting on March 5, the China Securities Journal reported yesterday.
Individual investors will be allowed to trade a minimum volume of 1,000 shares each time under the new rules rather than the current requirement of 30,000 shares. In the OTC board, investors can only trade blocks of securities directly, rather than through an exchange, providing liquidity and anonymity to buyers
But the authorities have not decided what type of brokerages can trade in the OTC market, the newspaper said.
A total of 43 brokerages across the country have so far won approval to trade OTC, according to a statement by the Securities Association of China on Tuesday.
China launched its first OTC market in June 2001 in Beijing to accommodate stocks de-listed from the Shanghai and Shenzhen bourses as well as stocks formerly listed on the Securities Trading Automated Quotations system and National Electronic Trading system.
STAQ and NET, set up in the 1990s for firms that could not meet main-board listing terms, were closed in 1999 because of rampant irregularities. In 2006, the Beijing-based OTC board was turned into a market where technology firms in Beijing's Zhongguancun Technology Park could trade shares.
In July last year, Shanghai set up its OTC market in Zhangjiang Hi-Tech Park in Pudong New Area to help start-up firms in the city and in the Yangtze River Delta region raise money.
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