The Shanghai Stock Exchange Science and Technology Innovation Board is being called the STAR Market for short by Chinese authorities.
Rules of Listing
To attract technology companies, STAR allows the listing of companies with multiple share classes, Red Chip companies already listed abroad, and currently unprofitable companies.
The listing requirements in STAR is based on registration and disclosure rather than approval. Regulators are to have limited roles in the listing process, and would have no say over how shares are priced (e.g. as a multiple of the price to earnings ratio) or when they came to market, unlike other stock market in mainland China.
It is a Chinese science and technology focused equities market established on July 22, 2019.
SSE set up the new board to offer a lighter listing environment for budding science and technology companies – for example, issuers can have multiple share classes and be unprofitable.
STAR has been touted as Shanghai’s equivalent to America’s Nasdaq, with state media alluding to its goal as giving Chinese science and technology companies greater access to capital markets. As of July 2020, it is valued at more than US $400 billion
A system based on registration and disclosure is seen as more market-oriented and more in line with the system in markets like the United States. Regulators hoped the experiment can offer Chinese companies more access to financing, thereby allowing the financial system to support and bolster the real economy.
Between Jan. 1 and Sept. 15, it hosted 103 IPOs, raising a total of US$25.22 billion. As of Sept. 15, there were nearly 400 IPOs in the pipeline, including Ant, the mobile payments offshoot of Alibaba Group Holding Ltd.