SCIO briefing on the reform and development of the capital market

Lianhe Zaobao:

My question is about IPO. Recently, I heard that CRSC planned to help some local financial technology (Fintech) enterprises by making it easier to go public in the Chinese mainland market. Is that true? What are the specific methods? My second question is: since many Fintech enterprises do find it hard to go public on the Chinese mainland, they prefer the U.S. market to go public. How can you compete with overseas exchanges and encourage more Fintech enterprises to launch their IPO here?

Liu Shiyu:

Where to go public is, of course,an enterprise’s own choice, and the CRSC respects such choices. Public launches overseas can be supervised, and that is beneficial for overall enterprise governance, which is a good thing. Related systems in the Chinese capital market are being modified. For example, enterprises that want to launch an IPO on the Main Board should at least show three consecutive years of profit; however, most Fintech enterprises find it hard to meet such requirements. Currently, the Growth Enterprise Market and the NEEQ also face this situation. Investors like to share the achievements of those technology-based and Fintech enterprises, while also sharing the risks they may face.

As for you mentioned, about the competition between us and the New York Stock Exchange, or the Singapore Exchange, actually speaking, we are different examination rooms although using similar questions but different languages. For those enterprises going public overseas, they also have responsibilities because to some extent they represent China’s national image. Currently, there is only cooperation, but no competition between us and those foreign exchanges. I’m very confident about the development of the Chinese capital market, so I believe competition will emerge someday. Thank you.