The Shanghai Stock Exchange ("SSE") has recently issued the Circular on Matters Concerning the Education and Suitability Management of Investors Investing in the Science and Technology Innovation Board (the "Circular").
The Circular reads that members shall, in strict accordance with the Special Provisions of the Shanghai Stock Exchange on Trading of Stocks on the Science and Technology Innovation Board, prepare work rules for the suitability management of investors investing in stocks listed on the science and technology (sci-tech) innovation board, and perform the suitability management of these investors. An investor intending to participate in the trading of stocks listed (including the subscription of newly issued stocks) on the sci-tech innovation board shall satisfy the SSE's requirements for investor suitability management, and members are prohibited from allowing any investor failing to meet the investor suitability requirements to trade stocks on the sci-tech innovation board. In addition, the Circular expressly states that, a member may grant an individual investor the authority to trade stocks on the sci-tech innovation board, provided that this individual investor satisfies three requirements, one of which reads that "the average daily assets in the investor's securities account and in his or her capital account for 20 trading days before his or her application for such trading authority, total at least CNY500,000". Furthermore, the Circular notes that each member shall examine whether an individual investor meets the investor suitability conditions before it grants the individual investor the authority to trade stocks on the sci-tech innovation board, and clearly specify the detailed recognition criteria.