A glimpse at the future of the new third board


The business rules for the National Small and Medium-sized Enterprise (SME) Share Transfer System, the new third board, were unveiled on 8 February 2013 following the China Securities Regulatory Commission’s promulgation of the Measures Governing the Supervision of Non-listed Public Companies last year. Under the new rules: companies applying for a listing on the new third board are extended to include non-high-tech companies; there are no restrictions on corporate

全朝晖 Quan Zhaohui
全朝晖 Quan Zhaohui

ownership; the number of shareholders of a non-listed public company can be over 200; and each lot size can be split into 1,000 shares as a starting point for trading. Market makers are also introduced, investment is opened to natural persons, and licensed companies can make secondary offerings or private placements.

The table below describes the main features of the new third board by comparison:

A glimpse at the future of the new third board 2

The new third board is now only extended to include those companies in the high-tech parks in Zhongguancun of Beijing, Zhangjiang of Shanghai, East Lake of Wuhan and Binhai of Tianjin. It is anticipated that the pilot scheme may soon be extended nationally. To implement a board switching mechanism for the new third board, the CSRC and the stock exchanges will also revamp various systems like the system for initial secondary offerings in accordance with the Securities Law and other regulations.

Quan Zhaohui is a senior partner of ETR Law Firm. Telephone: +86 130 0517 0192; Email: qzh@gxlawyers.com

Zhao Jianfa is a partner of ETR Law Firm. Telephone: +86 138 2510 6007; Email: zhaojianfa@gxlawyers.com

Jia Haixia is a partner of ETR Law Firm. Telephone: +86 139 0305 9805; Email: jiahaixia@gxlawyers.com

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