SHANGHAI: China will expand and liberalise access to its over-the-counter (OTC) market to all qualified small and medium-sized enterprises (SMEs), the Chinese State Council announced yesterday.
The announcement follows reports in state media on Friday quoting unnamed sources saying the reform could happen before the end of the year, with some saying it could come as soon as December 25, but it appears the government moved even more quickly than even insiders expected.
The China Securities Regulatory Commission, acting under instructions from the State Council, will eliminate approval procedures for applicant companies with 200 or fewer shareholders.
The announcement also said institutional investors will be encouraged to participate, in particular brokerages, insurance companies, investment funds and foreign funds.
The move to ease access to the OTC market, which focuses on facilitating private placements in smaller Chinese firms, follows announcements that regulators will allow China’s IPO market to re-start in early 2014.
Beijing has been consistently trying to expand access to credit for small- and medium-sized enterprises (SMEs), which are usually too small to list but at the same time are too risky for Chinese banks to finance.
Reuters
