Shenzhen exchange imposes new rules on ChiNext

The Shenzhen Stock Exchange has increased restrictions on the money raised by companies issuing initial public offerings on the ChiNext board, the Wall Street Journal reported. The new rules limit companies to an annual 20% cap on the usage of excess IPO funds for loan repayment or working capital expenditures. Companies will also require shareholder approval to invest more than US$7.3 million, or 20% of excess IPO funds, in a single project. The China Securities Regulatory Commission has also reconsidered its IPO-pricing mechanism, which so far has allowed most of the 36 companies listed on ChiNext to exceed 200% of their targeted fundraising goals.