New Board to Bring Major Multinational Firms to Mainland Soon

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Mar. 10 – The Shanghai Stock Exchange completed draft listing and trading rules of its international board which will allow overseas companies to float shares in China’s A-share market, SSE Chairman Geng Liang said on Monday.

The draft rules are completed, but they are still working on the details, and the revised rules will be available for public comment soon, according to Geng.

The shares of overseas companies listed on the international board will be denominated in Chinese yuan. The offering prices should not be above their listing prices on the original markets, as floating shares on China’s A-share market is an act of refinancing by overseas companies.

The SSE is also actively studying the rules on the return of red chip companies, which have business in the mainland but are listed on the Hong Kong Stock Exchange.

Meanwhile, the Shanghai bourse will also introduce corporate bonds of listed companies and cross-market-exchange-traded funds (ETFs) to be traded on the exchange. So far, 20 listed companies have received approval and dozens of others have expressed an interest. The framework of the Shanghai-Shenzhen 300 ETF has also been established and will be launched soon.

The trading of overseas ETFs, which will allow Chinese investors to buy a basket of securities that track overseas indices, will also make their debut on the exchange this year, but there are still some technical difficulties for the exchange to overcome, Geng said. So far, a total of 12 overseas stock exchanges have agreed to let the Shanghai bourse list ETFs that track their indices.

The launch of the international board is being widely watched as it will bring a string of multinational companies including banking giant HSBC, global exchange operator Nasdaq OMX Group, and red-chip firms such as China Mobile to the mainland fund raising pool. This is a crucial step in making Shanghai an international financial center.