The Beijing Stock Exchange (BSE; Chinese: 北京证券交易所) is a Chinese stock exchange headquartered in Beijing. It is one of mainland China’s three autonomous stock exchanges, together with the Shanghai Stock Exchange and the Shenzhen Stock Exchange.
Beijing Stock Exchange Backstory
For years, the Beijing city administration fought to enhance the National Equities Exchange and Quotations (NEEQ) exchange (nicknamed “The New Third Board” (新三板)) to serve as a home for US-listed Chinese companies.
China’s leader, Xi Jinping, announced the building of the Beijing Stock Exchange on September 2, 2021. The goal was to assist China’s small and medium-sized businesses (SMEs).
The NEEQ exchange was reformed, and the Beijing Stock Exchange was established as the major platform for SMEs.
The NEEQ exchange had around 6,000 companies listed as of 2020, with the majority of them being SMEs.
Beijing Stock Exchange Co., Ltd. completed its business registration on September 3, 2021. According to the registration documents, NEEQ is the sole shareholder and owner of the Beijing Stock Exchange. The company’s registered capital was RMB 1 billion, and its registered address was the same as NEEQ’s.
The Beijing Stock Exchange announced recommendations on investor qualification criteria on September 17, 2021.
The China Securities Regulatory Commission announced guidelines for the exchange on initial public offers (IPOs), refinancing, and supervision on October 30, 2021. The Beijing Stock Exchange began trading on November 15, 2021. On that day, 81 companies began trading on the exchange. 71 of them were transferred from the NEEQ Exchange’s “Select tier.” The following ten companies made their stock market debuts.
Beijing Stock Exchange Regulations and Policies
- To trade on the exchange, individual investors must have at least RMB 500,000 in securities assets and at least two years of expertise in securities investing.
- The price change of a stock on its first trading day is unrestricted. If the stock’s price rises or falls by more than 30 percent, trading will be temporarily halted for 10 minutes.
- Stocks traded on the exchange will not be allowed to increase or fall more than 30% in a single trading day after the first trading day.
- Capital requirements do not apply to institutional investors.
An Overview of the New Beijing Stock Exchange
German investors frequently overlook China’s burgeoning financial markets, both equity and bond markets. Today, however, IPOs are one of the most prevalent ways of financing for many local Chinese companies (especially those in the technology sector). In most situations, IPOs are also the favored method of departure for financial investors.
A new stock market has been operating in Beijing since September 2021. On September 2, 2021, Chinese President Xi Jinping said that China would establish a Beijing Stock Exchange and turn it into a key hub for serving innovative small and medium-sized firms (SMEs). According to market insiders, the new third national stock exchange on the Chinese mainland might start trading as soon as the end of the year, with an initial 66 companies from NEEQ’s “chosen tier”
What will the new Beijing Stock Exchange be like to use?
The Beijing Stock Exchange has made proposed listing, trading, and member administration regulations available for public comment until September 22, 2021. In addition, the CSRC has released various draft regulations for public comment until October 3, 2021, including provisions on the exchange’s governance structure and its obligations in overseeing share issuers.
The Beijing Stock Market announced guidelines clarifying the qualifications for qualified stock exchange participants on September 17, 2021. To be listed on the Beijing Stock Exchange, retail investors must have securities holdings of at least RMB 500,000 and a two-year investing history. Institutional investors are not subject to any capital requirements. Stocks to be traded will not be allowed to climb or fall more than 30% in a single trading day, according to the CSRC. New listings will also be exempt from any price-change caps on their first day of trade. The daily price cap will only apply on their second day of trading.
The NEEQ, also known as the New Third Board, was established in 2012 to assist micro enterprises, SMEs, and startups who are unable to meet the listing conditions of the Shanghai and Shenzhen stock markets.
The NEEQ is currently divided into three tiers:
- the “select tier” (currently hosting 66 companies) for high-quality NEEQ companies that are supposed to have good profitability or be very innovative,
- the “innovation tier” for companies that do not meet the “select tier” requirements but are well-managed, and
- the “base tier” for the remaining companies.
The NEEQ’s “select tier” enterprises will be integrated into the Beijing Stock Exchange. Companies in the other two categories will continue to trade on the NEEQ’s over-the-counter market. Companies that have been on the “select tier” for 12 months, meet the expected market value and certain financial standards, have registered with the CSRC, completed a public offering to nonspecific qualified investors, and meet requirements for the proportion of public shareholders can be listed on the Beijing Stock Exchange.
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