Private investors to be allowed in OTC exchange

Private investors will be allowed to trade shares of non-publicly listed small and medium-sized enterprises on the new national over-the-counter equity system, the newly launched exchange said in Beijing on Friday.

The National Equities Exchange and Quotations Co Ltd - the operator of the so-called "third board" - said that individual investors should have at least 30 million yuan ($4.76 million) in securities assets, and an investment experience in securities of at least two years to be able to invest.

The investment threshold for institutional investors is 50 million yuan, lower than the requirement for transactions on the main boards.

There are no special requirements regarding the financial conditions of companies applying for listing on the new board. Companies with all types of ownership will be able to be listed.

In February, the China Securities Regulatory Commission said that the number of shareholders of non-listed small and medium-sized enterprises in the OTC market could be more than 200.

A report from Changjiang Securities Co Ltd forecasted that by the end of the year about 500 companies will likely be trading in the new system.

The report added that securities companies are expected to get as much as 2.5 billion yuan from business stemming from the new market.

chenjia1@chinadaily.com.cn