Beijing Stock Exchange Optimizes New Stock Issuance and Listing Process to Send Positive Signals
On August 21, the Beijing Stock Exchange and China Securities Depository and Clearing Co., Ltd. announced the revised “Beijing Stock Exchange Stock Exchange Public Issuance and Underwriting Business Implementation Rules to Unspecified Qualified Investors” and two supporting guidelines. This move by the stock exchange aims to optimize the new stock issuance and listing process, reducing the overall time-consuming by approximately 20%.
Market participants have expressed their support for this optimization, stating that it conveys a positive signal of the Beijing Stock Exchange’s commitment to steady advancement of reforms. The revised process will help reduce the cost of investors’ “new” capital occupation and increase their enthusiasm for participation in subscriptions.
The optimization of the issuance and listing process primarily focuses on improving internal processes and tapping efficiency potentials without burdening market entities. The specific measures include shortening the freezing period of subscription funds and reducing the business processing interval of the purchase and listing links.
The freezing time of funds for investors to participate in the subscription of new shares has been shortened from 3 trading days to 2 trading days through technological transformation and streamlining of information exchange processes. Additionally, the interval between the disclosure of the issuance announcement and the purchase of direct pricing issuance has been adjusted from 2 trading days to 1 trading day, in alignment with the current situation of inquiry issuance. The overall process of direct pricing and competitive issuance and listing has been reduced from 13 trading days to 10 trading days, while the overall process of inquiry issuance and listing has been reduced from 17 trading days to 15 trading days.
The optimization of the issuance and listing process aims to improve the efficiency of capital use. It reduces the cost of investors’ “new” capital occupation and enhances their enthusiasm to participate in the subscription. At the same time, it reduces the overall time for issuance and listing, improving the financing efficiency of enterprises and promoting balanced development of the secondary market.
Zhou Yunnan, founder of Beijing Nanshan Investment, commented that the optimization will continue to adopt the full-amount cash purchase and subscription model for the “new issuance.” However, the capital occupation of “new issuance” will be reduced by one day, enabling funds to be unfrozen on the evening of the second trading day. The subscription time will also be shortened, enhancing the efficiency of capital recycling and the amount of single-share subscription funds.
In terms of investment, the cost of capital is also an opportunity cost. The relevant person in charge of the Guide Fund stated that considering the current level of the Beijing Stock Exchange’s winning rate, using a certain percentage of margin to participate in the “new” is expected to further reduce investor interest costs.
To ensure the effectiveness of the optimization, the Beijing Stock Exchange conducted a customs clearance test on August 19. Participating institutions included the Beijing Stock Exchange, the National Equity Transfer Company, China Settlement, Shenzhen Securities Connect, securities companies, fund companies, and trustees.
It is worth noting that this article is sourced from the China Securities Journal and does not constitute investment advice. Readers are advised to proceed at their own risk.
Source: China Securities Journal