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Tianjin may set up OTC exchange
By Li Fangchao (China Daily)
Updated: 2007-03-12 10:37
Pi Qiansheng, director of the Administrative Committee of the Binhai New Area (BNA) in Tianjin, said the new OTC exchange would be established within the year if "everything goes smoothly" meaning it still needs approval from the State Council. The BNA is widely considered to be the country's third economic engine after Pudong in the Yangtze River Delta and Shenzhen in the Pearl River Delta. A series of preferential financial policies were introduced to boost its development last year. The State Council is also considering using the BNA to carry out a series of pilot reforms in finance and land management. The OTC market will mainly deal with equity transactions of unlisted public companies, Pi said. In an OTC market, securities are traded by dealers who negotiate directly with one another over computer networks, rather than via a central exchange. In general, securities are traded over-the-counter because the companies are not big enough to meet the requirements for exchange listing. Chinese mainland has two main boards in Shanghai and Shenzhen, a small and medium-sized enterprise board in Shenzhen, as well as an OTC trading system for Beijing-based technology firms. Pi said the new OTC bourse would be supplementary to the current capital market in China. "It is a very important attempt to diversify property rights and capital," he said. It will also give more attention to companies that focus on scientific innovation. (For more biz stories, please visit Industries)
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