NEEQ: China Stock Markets are Expanding

NEEQ: China Stock Markets are Expanding

NEEQ: China Stock Markets are Expanding

A total of 30 new small and medium-sized enterprises debuted on China’s National Equities Exchange and Quotations (NEEQ), also known as the “new third board,” in the past week.

The newcomers brought the total number of companies on the board to 11,649, data from the NEEQ showed.

Turnover on the board reached 4.7 billion yuan (about 710 million U.S. dollars) last week, up 8.04 percent from the previous trading week.

The NEEQ was launched in early 2013 to supplement the Shanghai and Shenzhen stock exchanges in serving small and medium-sized enterprises.

It is seen as an easy financing channel for small businesses with low costs and simple listing procedures.

The National Equities Exchange And Quotations Co., Ltd. (NEEQ) is a Chinese over-the-counter system for trading shares of public limited company (Chinese: 股份有限公司) that not listed in the two stock exchanges in Shenzhen and Shanghai. The exchange was also nicknamed “The New Third Board” (Chinese: 新三板) in China, as there was an old trading system that NEEQ replaced.

The total number of companies listed on the National Equities Exchange and Quotation (NEEQ) surpassed 11,200, with a turnover of RMB 3.44 billion (US$505.88 million).

SMEs looking to list on the NEEQ need to meet the following conditions:

Be lawfully established;
Have a well-defined business plan;
Have a good corporate governance mechanism;
Have legitimate business;
Have a clear equity structure;
Issue and transfer shares in accordance with the law;
Be recommended and supervised by a legitimate brokerage; and
Subsist for at least two years.

Applicant entities then enter into an agreement, with both the NEEQ board and the China Securities Depository and Clearing Company Limited (CSDCC), regarding recommended listing and securities traders. Once this is done, listing procedures can commence.

The NEEQ divides its listed companies into two markets, namely the ‘innovation market’ and ‘basic market’, as a means to manage companies at different stages of development.

Stock exchange can be made through means of agreement, auctions, or market making. For exchange made by agreements, the NEEQ will arrange for a call auction. For those made by market making, two leading securities firm will need to provide market making quotation services.

If you are interested in listing on the NEEQ call or text +1 631 482 0376.

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S. Jack Heffernan Ph.D. Funds Manager at HEFFX holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.

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