DEFINITION of Shenzhen Stock Exchange (SZSE)
The Shenzhen Stock Exchange (SZSE) is one of two main stock exchanges operating independently in mainland China. The other exchange is the Shanghai Stock Exchange (SSE). The SZSE is a self-regulated legal entity under the supervision of the China Securities Regulatory Commission (CSRC). The main functions of the SZSE are to oversee securities trading, provide the facilities for securities trading and devise operational rules.
BREAKING DOWN Shenzhen Stock Exchange (SZSE)
Established December 1, 1990, the Shenzhen Stock Exchange is the world's ninth-largest stock exchange by market capitalization. The SZSE has trading sessions four hours a day, five days a week from 9:30 a.m. - 11:30 a.m. and 1 p.m. - 3 p.m. Its products include A-shares, B-shares, indices, mutual funds, fixed income products and diversified derivative financial products. The SZSE supports China’s multi-tiered capital market system with three boards: the Main Board, the SME Board (launched in May 2004) and the ChiNext Market (launched in October 2009).
The SME Board
The SME Board was established to serve companies with well-defined businesses that are stable in profitability. Many of the enterprises on this board are manufacturing companies. In fact, the SME Board is considered a barometer of the country’s manufacturing sector.
The ChiNext Market
The ChiNext Market, while open to companies of all sizes that meet the listing criteria, essentially focuses on innovative growth companies and startups. These areas of innovation include technology, management and business models.
The Shenzhen Stock Exchange Today
The Shenzhen Stock Exchange is located in Shenzhen, a modern city in southeastern China. The SZSE has signed a memorandum of understanding (MOU) with 30 major stock exchanges and financial institutions across the world. It is a member of the World Federation of Exchanges (WFE) and the Asian and Oceanian Stock Exchanges Federation (AOSEF), and an affiliate member of the International Organization of Securities Commissions (IOSCO).
The Shenzhen Stock Exchange and the Shanghai Stock Exchange
Smaller and emerging-sector companies trade on the SZSE while larger, state-owned companies such as banks and energy firms often trade on the SSE. Both exchanges were launched in 1990.