The Agency Share Transfer System, also known as the "Third Board Market," is a platform approved by the Securities Association of China that provides standardized share transfer services for non-listed joint-stock companies, primarily targeting small and medium-sized enterprises (SMEs). It offers a channel for share circulation and financing to enterprises that do not yet meet the listing requirements for the Main Board or the Growth Enterprise Market (GEM).

Advantages of the Agency Share Transfer System:

1. Relatively Lower Threshold

Compared to the Main Board and GEM, the listing requirements for the Agency Share Transfer System are more lenient. This allows early-stage and smaller enterprises to access the capital market, showcase their value, and attract investor attention. For example, some technology innovation-driven enterprises with limited initial profitability can secure financing through this system by leveraging their unique technological advantages and growth potential, thereby accelerating their development.

2. Enhanced Share Liquidity

The system enables share transfers among specific investors, improving share liquidity. This not only provides an exit channel for shareholders but also creates opportunities to attract new strategic investors. For instance, after listing on the system, a small software company attracted multiple venture capital firms, bringing in new funding and resources that advanced its R&D and market expansion.

3. Standardized Corporate Governance

Listing on the system requires companies to establish sound corporate governance structures, robust financial management systems, and disclosure mechanisms. This helps improve management practices and enhances market competitiveness. Transparent disclosures also create a clearer investment environment, reducing risks for investors.

Listing Requirements:

1. Legally established and operational for at least two years. For limited liability companies converting to joint-stock companies based on original net asset value, the operational period can be counted from the establishment date of the LLC.

2. Clear business scope and sustainable operational capacity.

3. Sound corporate governance mechanisms and compliant operations.

4. Transparent equity structure with lawful share issuance and transfers.

5. Sponsorship and continuous supervision by a designated securities firm.

6. Other requirements specified by the National Equities Exchange and Quotations (NEEQ).

Note: Pre-listing total share capital must be no less than 5 million shares, with no mandatory financial performance metrics.

Daily Quiz:

The Agency Share Transfer System is also called ( ).

A. Second Board Market

B. Growth Enterprise Market (GEM)

C. Third Board Market

D. SME Board

Answer: C.