Strategies To Enhance Investor Confidence In The New Three Boards

The new three board market is also a hot word for the year of 2015. Can you briefly introduce the development process of the new three board market?

The new three board market (SME share pfer system) was developed on the basis of the pilot pfer of shares in the unlisted Limited by Share Ltd of Zhongguancun (000931) science and Technology Park, and it was widened in Shanghai, Wuhan and Tianjin in August 2012.

In June 19, 2013, the Executive Council of the State Council decided to accelerate the development of a multi-level capital market, expand the pilot system of SME share pfer to the whole country, and encourage the development of innovative and entrepreneurial SMEs.

Subsequently, in December 6, 2013, the SFC issued the new three boards, which could be extended to the whole country.

In December 31, 2013, the national share pfer system for small and medium-sized enterprises accepted the application of listing for the whole country.

After the expansion of new three boards to the national market, the number of listed companies has increased rapidly.

Compared with 2013, the number of entrepreneurs listed in 2014 increased by 341.57%, compared with 226.57% in 2014. As of December 31, 2015, the number of Listed Companies in the new three board market reached 5129.

The total share capital is 295 billion 951 million shares, with a total market value of 2 trillion and 458 billion 442 million yuan.

After August 2014, the stock exchange system launched the market maker trading system. The two tier market was gradually active and reached its peak in the first half of 2015.

Excessive speculation and irregularities often occur in the process of rising market.

Since the second half of 2015, due to the impact of the A share market, the volume of trading in the two tier markets of the new three boards has been shrinking, liquidity risks are constantly emerging, and the market is in a doldrums. Investors' confidence in the new three boards has been greatly affected.

First, we should pay attention to the linkage and synergy between the new third board market and the two tier market, so as to maintain the balanced development of the market.

As of March 4, 2016,

Listed company has reached more than 5800, while only 1320 listed company has been pferred to the market. The development of the new third board market and the two tier market are seriously unbalanced.

Therefore, while we are helping the large number of small and medium-sized enterprises in the new third board market, we should also take account of the liquidity of the two tier market. Only in this way can we promote the healthy development of the whole market.

Second, strengthen information disclosure and strengthen supervision in matters.

The new three board market must ensure the authenticity and integrity of information provision.

We should increase penalties for enterprises' financial fraud and market participants' manipulation of the market and insider trading, so as to ensure fair and open market development and improve market operation efficiency.

Third, standardize the new three board enterprises' private placement and set up a block trading platform.

Strict examination

To supervise the use of its raised funds, and to increase the market price that is obviously lower than the two level market.

Be restricted.

Set up block trading platform, and disclose its trading price and quantity, regulate bulk trading.

Fourth, we should further play the role of market makers to ensure market stability.

Market makers can make public announcements of long-term promising stocks through their own professional judgement to boost market confidence.

The market maker is the creator of liquidity, and the stock pfer system can reward the market maker and offer a fee based on the strength of the liquidity contribution, so as to encourage them to actively facilitate the paction.

Fifth, we should substantially reduce the threshold of investors and ensure smooth access to direct financing.

The threshold of investors in the new three board market is too high, and the funds for opening accounts will reach more than 5 million yuan. This will block investors from more than 95% of the securities market, and also restrict the development of the new three board market.

The threshold of investors is too high, which has seriously hindered the investors' financing to small and medium-sized enterprises, violating the original intention of establishing the new three board market, resulting in the indifference of the new three board market, and also caused the inadequate paction in the new three board market.

Therefore, we must reduce the threshold.

Now, the new three board market is very low, which is a good time to lower the threshold.

Lowering the threshold is conducive to the introduction of live water into the market, increasing market liquidity and promoting market activity.

Sixth, the new three board market should launch a bidding trading system at the right time.

Bidding pactions can greatly stimulate the market and increase the circulation of the market.

The core of the market is paction. Only by fully trading through the market can the reasonable valuation of listed companies be formed and a reasonable market price can be formed.

At present, a large number of enterprises in the new three board market are only listed, and the phenomenon of not making market pactions is abnormal, which violates the principle of marketization.

All new listed companies should enter the two tier market for pactions.

Let the price area of the paction be divided into the best and the inferior.

Seventh, clean up the market and improve the delisting system of the new three board market.

For those listed companies that fail to meet the standards and have poor quality, they must be delisted to ensure the survival of the fittest in the market.

Enterprises with long-term listing and no trading should also be delisted, so as to prevent the increase of "zombie enterprises" in the market and improve the quality of the new three board market.