It is most appropriate to describe the development of China’s National Equities Exchange and Quotations (hereinafter referred to as "NEEQ") as changing with each passing day. Upon the review over the past six months, the vitality and vigor of NEEQ can be seen greatly from the issue of relevant policies and rules, the listing of enterprises and their refinancing. Lawyers, as professionals providing legal services for the capital market, have also been fully aware of this spring-like vitality.

On December 13, 2013, the State Council promulgated the Decision of the State Council on Issues Relating to the National Equities Exchange and Quotations (Guo Fa [2013] No.49, hereinafter referred to as “the Decision”) and made clear that the purpose was bringing into full play to the function of the NEEQ in serving the development of medium, small and micro enterprises. According to the Decision, the NEEQ mainly serves the development of innovation-oriented, entrepreneurial and growth medium, small and micro enterprises. The domestic joint stock companies that satisfy relevant requirements may all apply for listing on the NEEQ to publicly transfer shares and carry out equity financing, debt financing, asset reorganization and other business. As the NEEQ is a necessary part of the multi-level market being built in China and its function is also set in the comprehensive services as the channel of achieving the different functions of the enterprises’ financing and recombination, also its value, effects and the active degree have covered and gone beyond the formulation of so-called New/Old Three Board, therefore the formulation of three

On March 27, 2014, the China Securities Regulatory Commission (CSRC) released the Issuance Supervision Q&A and responded to the issues of choosing the place for enterprises’ IPO and controlling the time of application. The Issuance Supervision Q&A especially pointed out that “currently the number of the enterprises to list on the main board (SME) and GEM is relatively large, new applicants have to wait for a long time.......” Therefore, to reduce the cost and burden of the enterprises, CSRC suggested the sponsors to assist the issuers in reasonably controlling the application time to avoid the unnecessary negative impact on the normal business operation of enterprises as the result of extended examination period. Meanwhile, CSRC encourages and supports qualified enterprises to list on the NEEQ and carry on equity/debt financing, or turn to overseas listing. As for the reports and expectations of "blowout" listing that can be heard all over the market, we understand that during the implementation process for the establishment of a multi-level capital market and the issue system reform, the adjustment of the pace of examination and approval is closely linked with the establishment of the system. The policies released from time to time should be analyzed from the positive perspective and should not be explained as just a single pointing to a trading platform. The purpose of NEEQ itself determines its characteristics in the liquidity, constitution of investors, financing ability and other aspects. The enterprises should make their decisions objectively in the time and the selection of specific landing location of capital market.

It should be specially emphasized that, despite the lower examining standards for enterprise listing on the NEEQ compared to the main board and GEM, the enterprises’ listing expectations will need to be adjusted under the influence of the examination of NEEQ, especially the continuous supervision of host brokerage and the business expectations with the number of applying enterprises increasing. During the preparation stage of the listing, enterprises still need to follow a quasi public offering listing corporation standard and review the development history, present structure of the shareholders, corporate governance, asset acquisition and holdings, financial processing and etc., so as to get ready for the subsequent requirement of continuously open and transparency.