Shenzhen Stock Exchange Overview

Published on September 24, 2008 by brooks | This story has been viewed 1,088 times

Shenzhen Stock Exchange Overview

The Shenzhen Stock Exchange is a mutualized national stock exchange under the China Securities Regulatory Commission (the CSRC), that provides a venue for securities trading. A broad spectrum of market participants, including 540 listed companies, 35 million registered investors and 177 exchange members, create the market. Here buying and selling orders are matched in a fair, open and orderly market, through an automated system to create the best possible prices based on price-time priority.

Since its creation in 1990, the Shenzhen Stock Exchange has blossomed into a market of great competitive edges in the country, with a market capitalization around RMB 1 trillion (US$ 122 billion). On a daily basis, around 600,000 deals, valued US$ 807 million, trade on the Shenzhen Stock Exchange.

China securities market is undergoing fundamental changes. The implementation of the new Securities Law, Company Law, self-innovation strategy as well as the development of non-tradable share reform embodies enormous opportunities to the market. Adhering to the principle of “Regulation, Innovation, Cultivation and Service”, the Shenzhen Stock Exchange will continue to maintain its focus on developing the Small and Medium Enterprises Board, while seeking for a tier market.

What We Do

The Shenzhen Stock Exchange strives to create a fair, open and orderly market to meet diversified financing needs. The statutory obligations of the Shenzhen Stock Exchange include:

1. Examine listing qualifications

The Shenzhen Stock Exchange is the statutory authority to vet listing qualifications of companies which have been offered to the public, as approved by the CSRC.

2. Provision of market

We provide the market and means of raising capital through equities and debt issues. We give busineShenzhen Stock Exchanges, big and small, access to a liquid pool of investment capital. Trading information is diShenzhen Stock Exchangeminated to allow real-time access.

3. Monitoring of trading

A market surveillance team with auto-alert and trade analysis functions is put in place to deter market abuse.

4. Ensuring continuous listing compliance

The Shenzhen Stock Exchange works to ensure that listed issuers meet continuous listing standards. An issuer shall be suspended from trading or even de-listed if applicable criteria are not met.

5. Supervision of Exchange members

The Shenzhen Stock Exchange monitors the Exchange members to see that they maintain financial integrity and comply with the Exchange rules.

Our Strengths

1. Emerging economy and booming prosperity

Emerging corporate China, robust national economy and booming prosperity are strong engine to the securities market.

2. Market opening-up

As China joined the WTO, it is increasingly opening up to foreign investment. Qualified foreign institutional investors are gaining strength in the market.

3. Sophisticated infrastructure

Shenzhen Stock Exchange’s technology-led approach keeps it constantly in line with the state-of-the-art technologies in trading, clearing and regulation.

4. Tier depository system

Each beneficial investor keeps an individual account with the clearing house as well as a sub-account with his broker. The tier depository system provides the Shenzhen Stock Exchange an edge to surveil the market and provide ancillary services.

5. Timely innovation

The Shenzhen Stock Exchange is successfully changing and growing on the run as it adjusts to evolving market and investor demand. It is committed to competing with great service, speed, efficiency and innovation.

Tier Market

Shenzhen Stock Exchange Commitment to Tier Market

1. Help main board companies to grow bigger and stronger through listings of holding groups;

2. Strengthen SMEs cultivation and SME Board innovation;

3. Optimize stock transfer system to open up an effective trading platform for non-listed public companies and de-listed companies;

4. Take a pro-active approach on launching the new market in the spirit of newly implemented Securities Law and Company Law;

5. Further new product development in equities and derivatives.

Small and Medium Enterprises Board

The Small and Medium Enterprises Board is designed as an exclusive market segment for s-mall- and mid-caps with pronounced core business, high growth potential and intensive technological contents. The SME Board explores with innovative and customized solutions for small- and medium-sized enterprises in trading, disclosure and stock watch.

SME Board Innovation

To provide investors with assurance in terms of regulation and transparency, the SME Board takes tailor-made initiatives to ensure their protection:

1. Open call auction in pre-opening session is introduced to ward against market manipulation in price formation by allowing greater transparency;

2. Closing prices are determined through last-three-minute call auction;

3. Deviation in volatility, turnover and closing prices is brought into stock watch to curb market abuse;

4. Made obligatory are 1) regular audit raised fund usage compared to publicized investment  targets; 2) express corporate results; 3) annual public meeting on corporate financial health  and business development; and 4) intermediary credit supervision system.

Exchange Rules and Guideline

1. Special Rules Governing Listings on SME Board and Special Rules Governing Trading on the SME Board are enacted to reinforce compliance on corporate disclosure and trading activities;

2. Good Faith Guideline for Listed Companies is aimed at improving corporate code of conducts with assistance of effective credit records and aShenzhen Stock Exchangessment system;

3. Guideline on Sponsorship specifies obligations of sponsors and enhances their awareness thereof;

4. Guideline for Company Directors aims at optimizing corporate governance by raising their obligation awareness.

Market Integration

As commitment to its WTO obligations, China speeds up market deregulation. Increasing foreign investments are being channeled in. Sino-foreign securities houses and fund managing companies are set up and continue to add in number. So far, 39 qualified foreign institutional investors gain access to the market, with authorized investment quota of US$6 billion.

As a full member of the WFE and AOSEF, the Shenzhen Stock Exchange has been playing an active role in the-world exchange community. The Shenzhen Stock Exchange has signed cooperative memorandum of understanding with exchanges worldwide, including Tokyo Stock Exchange, Korea Exchange, Australian Stock Exchange, Singapore Exchange, London Stock Exchange, Toronto Stock Exchange, Osaka Securities Exchange, Berlin Stock Exchange, National Stock Exchange of India, Chicago Boar-d Option Exchange and Chicago Mercantile Exchange, with an aim of mutual benefits and development.

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