China will adopt a net settlement system for trade on the OTC market, a national share transfer system for small enterprises that is also known as the New Third Board, the Shanghai Securities News reported Tuesday, citing China Securities Depository and Clearing Co. Ltd. (CSDC), the operator of the OTC market. Under the existing regime, the OTC market sees gross settlement of trades. But the CSDC will now be allowed to provide multilateral netting and guarantee services as a Central Counter Party, the report said. Meanwhile, market makers are barred from using their securities accounts for other transactions. The move is aimed at boosting clearing efficiency. The New Third Board was initiated in 2006 as an experimental platform intended to facilitate financing for China’s non-listed small and promising high-tech enterprises, allowing them to transfer shares and raise funds for specified purposes.
– Contact HKEJ at [email protected]