Question 1: What is the SME Board?

Question 2: What does SME board mean?

Small and medium-sized enterprise board - is a special section for small and medium-sized companies set up by the Shenzhen Stock Exchange to encourage independent innovation.

Companies within the sector generally have the characteristics of fast revenue growth, strong profitability, high technological content, good stock liquidity and active trading, and are regarded as China's future "Nasdaq".

The GEM (SecondBoard) is a concept corresponding to the Main Board. It refers to providing convenient financing channels for the development of small and medium-sized high-growth enterprises, high-tech enterprises and emerging companies outside the Main Board, and providing effective risk capital.

exit channel to a new market.

Many GEMs are also known as small capital markets or emerging company markets.

Comparing the definitions of the SME sector and the GEM, we can see that the listing objects and functions of the two are basically the same.

Even so, there are still differences between them, mainly in: (1) The entry threshold for the small and medium-sized enterprise sector is relatively high and the listing conditions are stricter, which is close to the existing main board market.

The GEM has lower entry barriers and more relaxed listing conditions.

(2) The operation of the small and medium-sized enterprise sector adopts a non-affiliated market model, also known as the one-two-board parallel system, that is, the small and medium-sized enterprise sector is affiliated with the Shenzhen Stock Exchange.

As a supplement to the Shenzhen Stock Exchange, the small and medium-sized enterprise sector operates together with the Shenzhen Stock Exchange. It has the same organizational management system and trading system, and even adopts the same regulatory standards. The main difference is the difference in listing standards.

.

For example, this is the case with the SecondBoard of the Singapore Stock Exchange, the secondary markets of the Kuala Lumpur and Thailand Stock Exchanges, and the Hong Kong Growth Enterprise Market.

The GEM established in the future in my country will operate in a model where the GEM and the main board market - the Shanghai Stock Exchange - operate separately, with separate organizational management systems and trading systems, and different listing standards and regulatory standards.

For example, this is the case with Nasdaq in the United States, OTC Exchange in Japan, ROSE in Taiwan, my country, and "New Market" in France.

(3) Judging from the chronological order of establishment, the small and medium-sized enterprise sector should precede the GEM.

In other words, the small and medium-sized enterprise sector is the prototype of the future GEM.

The connection between the small business sector and the GEM. The GEM market has now become the key to building a multi-level capital market system.

The construction of my country's GEM market should adopt the principle of gradual progress and be implemented in stages and steps.

The small and medium-sized enterprise sector can be launched first, which is the first step in establishing the GEM market.

If the SME sector is regarded as the low-level form and initial model of the GEM market, then the GEM is the advanced form and target model of the GEM market.

At the same time, the development idea of ??steadily promoting the construction of the GEM market starting from the establishment of a small and medium-sized enterprise sector has gradually become clear.

Taking the establishment of the small and medium-sized enterprise sector as the entry point and breakthrough point, we can accumulate useful experience for promoting the construction of the GEM market, explore a successful development path, and minimize the negative impact that the establishment of the GEM may have on the main board market, and then

Build a multi-level capital market system.

The title of my country's GEM market has gone through an evolutionary process from high-tech board, to the second trading system, to the second board market, and then to the GEM, which means that the original listing objects should be repositioned reasonably.

If the change from "High-tech Board" to "Second Board Market" and "GEM" is to reduce the negative impact caused by the bursting of the Internet high-tech stock bubble, then from "Second Board Market"

The terminology of "Board Market" and "GEM" was changed to "Small and Medium Enterprises Sector", which is more to take into account the restrictions of the current legal system and the pressure of the market environment.

In a situation where it is impossible to follow up at the relevant institutional level and the financing needs of small and medium-sized enterprises are increasing day by day, in order to avoid the resistance caused by the excessive risks caused by the establishment of the GEM, small adjustments to the listing conditions are made and the establishment of a small and medium-sized enterprise sector is convenient.

become a more realistic solution.

Rather than saying this is a compromise choice of "falling back and settling for the next best thing", it is better to say that it is a curved plan to save the country that follows the trend.

In this sense, the launch of the small and medium-sized enterprise sector is a "pathfinder" that emerged in the process of building a multi-level capital market system.

What are the investment advantages of the SME board compared with the main board?

The underlying index of the Small and Medium Enterprises Stock Fund (ETF) has the characteristics of high growth and high return. From the index base date of June 7, 2005 to April 21, 2006, the index rose by nearly 70%; while the Shanghai Composite Index only rose by 37.4% during the same period.

%, the Shenzhen Composite Index rose only 36.7%.