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Authored by: Taylor Hui and Faye Meng
On 12 November 2021, the Beijing Stock Exchange (BSE) issued Implementation Rules for Securities Trading by Qualified Foreign Institutional Investors and Renminbi Foreign Institutional Investors (Implementation Rules, available here in Chinese), which took effect on 15 November 2021, the same day the BSE launched.
The creation of the BSE was announced in this September, with a purpose to focus on innovative small and medium-sized enterprises. Since then, the China Securities Regulatory Commission, the National Equities Exchange and Quotations (NEEQ, normally known as the new third board) and the BSE have issued a set of rules for BSE’s operation, including the rules on listing, trading, and investor suitability management. The BSE is built on the basis of the existing select tier of NEEQ, which is the highest level tier of NEEQ.
Currently, among foreign investors, only Qualified Foreign Institutional Investors and Renminbi Foreign Institutional Investors (collectively, QFIs) are eligible to trade on the BSE. This is also consistent with the new rules governing the QFI regime issued in September 2020, which allow QFIs to invest in stocks listed on NEEQ.
The Implementation Rules set out general principles, regulatory requirements including requirements on information reporting/disclosure, trading rules and self-regulatory measures and disciplinary actions for QFIs trading on the BSE.
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