In order to coordinate with ChiNext (China’s Nasdaq-style market) stock listing, warn against and prevent the over-speculation risks on the first listing day of ChiNext stock, the Shenzhen Stock Exchange hereby releases the “Notice on Trading Monitoring and Risk Control for First Listing Day of ChiNext IPO Stocks” on September 24.
The “Notice” provides that with respect to ChiNext new stocks, 20 percent rise or drop or 50 percent rise or drop on the opening price for the first listing day will lead to temporary trading suspension, in addition, 80 percent downside/upside limit which is newly added also will bring the direct trading suspension which must be continued until 14:57 p.m. The “Notice” also adopts the current ways to monitor trading on the first listing day and handle abnormal accounts of substantial transactions on the Small-Medium Enterprise board, putting forward the clear requirements for securities companies to educate investors and regulate trading acts of clients.
The relevant person in charge of the SZSE introduced that the “Notice” gives full consideration to some features of ChiNext companies including relatively small size, new concept and difficult value estimate, large price fluctuation on the first listing day, based on the summary of experiences in terms of trading monitoring and risk control on the SME board especially since the resumption of IPO. The new indicator for trading suspension until the market close has been added in order to further prevent and control the trading risk, maintain the market order and protect the legitimate rights and interests of investors.
The spokesperson also said on the ChiNext as the new market, many enterprises show the strong growth and investors likely have the high expectation for performance of ChiNext stocks on the market. He also mentioned that investors shall notice that the ChiNext listed companies still remain in the business start and growth period, with the comparatively immature development and unsteady performance, furthermore some companies may go through the big ups and downs or face the business failure, or even worse fight against the delisting risk. Therefore, the SZSE released the risk control measure for the first listing day on the ChiNext, aiming to warn investors of investment risk on the ChiNext and cautious participation in the trading.
To the common concern on the market about the trading system for ChiNext, the person in charge said on September 23 that, except for the trading risk control system for the first listing day, the trading system for the ChiNext keeps consistent with the Main board, and the current “Trading Rules” still remains applicable.
In the near future, the SZSE continuously improves all trading systems arrangement including the trading risk control system for the first listing day in light of listing and trading situations of ChiNext stocks.