Recently, the National Equities Exchange and Quotations (i.e. the New Third Board) Limited Liability Company has released the Administrative Measures for the Hierarchical Management of Companies Listed on the National Equities Exchange and Quotations (for Trial Implementation) (the "Measures"), explicitly stating that companies listed on the New Third Board will be divided into those at the innovation and basic hierarchies, subject to differentiated supervision and service. It is said that the NEEQ Company will officially carry out the hierarchical management for such listed companies as of June 27, 2016.
The Measures propose that the listed companies will be divided into those at the innovation and basic hierarchies. The responsible person of NEEQ Company points out that the hierarchy in nature is a hierarchical management of risks, which is supposed to provide the suitable capital market platform for listed companies in different development phases with various market demands instead of simply categorizing such listed companies into "the good and the bad", or "the optimal and the secondary".
The Measures set the standard for how listed companies could be maintained at the innovation hierarchy, as the adjustment is tentatively made to be annum-based. In other words, listed companies at the innovation hierarchy will be adjusted to be at the basic hierarchy if they fail to meet any of the three maintenance standards.