Registration-based IPO reform of ChiNext a boon for innovative enterprises

As China officially starts to pilot a registration-based initial public offerings (IPO) system on ChiNext, the country's Nasdaq-style board of growth enterprises, innovative start-ups will enjoy more benefits from the capital market reform, the China Securities Journal reported Wednesday, citing an analyst.

On June 12, China introduced a series of measures to replace the approval-based IPO system with a registration-based one.

Boosted by the reform, the ChiNext Index led the gains among other major indices, closing 1.84 percent higher at 2,260.46 points Tuesday.

The reform has specified the position of the ChiNext board, which is to mainly serve growth-oriented innovative and start-up enterprises, support innovations in mode, service and format, and promote the in-depth integration of traditional industries with new ones. In comparison, the sci-tech innovation board, commonly known as the STAR market, is designed to support companies in the high-tech and strategic emerging sectors.

Noting the difference, the significance of ChiNext's registration-based pilot reform lies in addressing greater financing problems of small and medium-sized enterprises (SMEs), said Liang Hui, investment director at U Capital Corporation, a private equity firm.

Besides, the reform has streamlined approval and registration procedures for listing on the ChiNext board and cut the whole process to less than three months.

The move will enable innovative and growth-oriented SMEs to enjoy the development dividends of capital market reform, in a bid to further facilitate the upgrade and transformation of traditional industries, Liang said.