What is the Agency Share Transfer System?

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). Its establishment offers a channel for share circulation and financing to companies that do not yet meet the listing requirements of the Main Board or the Growth Enterprise Market (GEM).

Advantages of the Agency Share Transfer System

1. Relatively Low Barriers to Entry

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

2. Improved Share Liquidity

   The system enables the transfer of shares among specific investors, enhancing share liquidity. This not only provides an exit channel for shareholders but also creates opportunities for companies to attract new strategic investors. For instance, after listing on the system, a small software company attracted interest from several venture capital firms, securing new funding and resources through share transfers, which facilitated its technological 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 transparent disclosure mechanisms. This helps improve management practices and enhances market competitiveness. At the same time, standardized information disclosure provides investors with a more transparent investment environment, reducing risks.

Listing Requirements

1. Legally established and in operation for at least two years. For limited liability companies converted into joint-stock companies based on their original net asset value, the duration can be calculated from the date of the LLC's establishment.

2. Clear business operations with sustainable profitability.

3. Sound corporate governance mechanisms and compliant operations.

4. Clearly defined equity, with lawful and compliant share issuance and transfer practices.

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

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

Note: The total share capital before listing must be no less than 5 million shares, with no mandatory financial performance thresholds.