# China to Merge Exchanges

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Last modified: 2021-02-06

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By Shayne Heffernan · 2021-02-06
Tags: Shayne Heffernan on Investments, Stocks, Politics, Headline News, Shayne Heffernan, Opinion, Shayne Heffernan, China, Todays Trade Ideas
Signed: no (published before platform launch).
Nothing in this article is investment advice.

China's securities regulator on Friday approved merging the Shenzhen Stock Exchange's main board with the SME (small and medium-sized enterprises) board.

The merger will follow the general principles of unifying business rules and unifying operation supervision modes, with issuance and listing conditions, investor thresholds, trading mechanisms, and stock codes and abbreviations remaining unchanged, said Pi Liuyi, an official with the China Securities Regulatory Commission.

Involving only adjustments on parts of business rules, market products, technical systems, and issuance and listing arrangements, the merger will have little impact on market operations and investors' trading in general, a spokesperson with the bourse noted.

After the merger, relevant indexes involving the SME board need to be adjusted adaptively. Fixed-income products, futures, and options products would be mostly unaffected. The Shenzhen-Hong Kong stock connect program would also not be affected, according to the bourse.

These index adjustments will not contain substantial changes to index compiling methods. It would, therefore, not lead to the investment target adjustments of fund products tracking relevant indexes, the spokesperson said.

These arrangements are conducive to the stability and continuity of the indexes and ensuring the stable operation of fund products, the spokesperson added.

By the end of January, the Shenzhen Stock Exchange's main board and the SME board housed 1,468 listed companies, accounting for 35 percent of the A-share market's total.

These companies' market value amounted to 23.39 trillion yuan (about 3.61 trillion U.S. dollars), accounting for 29 percent of the entire market. Enditem

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