As approved by China Securities Regulatory Commission (CSRC), Shenzhen Stock Exchange (SZSE) initiated the merger between the main board and the SME board recently and released the business announcement.

The merger is a critical measure taken by CSRC to deepen the overall reform of the capital market. After the merger, the SZSE market will primarily consists of the main board and ChiNext board, with a more concise structure, more distinct features and clearing positioning, conducive to distinguishing the functions and roles of different boards, fortifying market foundation, and improving market efficiency as well as the vitality and resilience of the capital market in general. The role of the ChiNext board will be further underlined to thoroughly implement the innovation-driven development strategy, and the market function of SZSE fully leveraged for the purpose of facilitating the refinement of a mechanism for market-based allocation of capital factors and better serving the construction of the Guangdong-Hong Kong-Macao Greater Bay Area and the pilot demonstration area of socialism with Chinese characteristics and the overall national strategy for development.

The SME board was created out of the main board of SZSE on May 2004, which has provided conditions and experience for the establishment of the ChiNext board and a new channel for private enterprises to access the capital market. Over the past 16 years, SME-board listed companies have grown and prospered by and large, with the market value, performance, and trading characteristics consistent with those of the main board. The merger of the two is a natural selection that conforms to the law of market development and an intrinsic requirement of a concise and clear market system.

Upon the merger, the main board will position itself for supporting the financing and development of comparatively mature enterprises while maintaining its listing standards. The ChiNext board will focus on serving growing and innovative startups, especially companies of innovation, creativity and originality, and traditional industries that are deeply integrated with new technologies, new industries, new business forms and new models. With the main board and the ChiNext board as its mainstay, the SZSE market is capable of providing financing services for companies at different stages of development and of different types, further enhancing the capital market’s ability to serve the real economy.    

Arrangements for the merger will follow the principals of “a consistent system of business rules and regulatory model, and the same issuance and listing conditions, investor threshold, trading mechanism and stock code and abbreviation”, having a relatively small impact on the operation of the market and trading of investors. SZSE will, guided by CSRC, make proper adjustments to relevant business rules, products, technical systems and issuance and listing to ensure the sound and stable operation of the market. During the period from the release of the announcement to the completion of the merger, the existing business rules, and securities issuance and listing shall remain in force in the main board and SME board,  

SZSE will follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, earnestly implement the spirit of the Fifth Plenary Session of the 19th CPC Central Committee and the Central Economic Work Conference, and seize the new development stage in time. SZSE will thoroughly implement the new development concept, and promote the construction of a new development pattern. Upholding the “system building, non-intervention, zero tolerance” policy and the “four awes, one joint force” work requirements (to stand in awe of the market, rule of law, professionalism and risks and to leverage the efforts of all sides for the capital market’s development.), we will adhere to the market-oriented and law-based direction, and embrace openness, transparency, integrity and impartiality at work. Joining hands with all sides in the market, SZSE will make all preparations in a solid and orderly manner, go all out to ensure the smooth implementation of the merger of the two boards, and continue to enhance the sense of gain of all parties from the market reform. Besides, we will step up efforts to assist more outstanding companies in financing and development, and strive to build a high-quality innovative capital center and a world-class exchange.