The Shanghai Stock Exchange (SSE) and China Securities Index (CSI) have announced the upcoming launch of the SSE Science and Technology Innovation Board 50 Index – dubbed the ‘SSE STAR 50 Index‘ – that will track the largest stocks listed on the recently unveiled SSE Star Market.

The SSE Star Market officially opened for trading on 22 July 2019 with the listing of 25 companies.

The SSE Star Market is a Nasdaq-style board of the SSE that aims to attract tech firms for initial public offerings.

Its introduction reflects the government taking a more relaxed stance on Mainland China’s equity markets.

Companies listing on SSE Star Market can avoid much of the bureaucratic red tape associated with traditional main board listings.

The board officially opened for trading on 22 July 2019 with the listing of 25 companies.

The index will consist of the 50 largest stocks listed on the SSE Star Market that also pass certain liquidity requirements. Constituents will be weighted by float-adjusted market capitalization.

According to CSI, the index will launch on the eleventh trading day after 30 companies are listed on the board. The initial number of stocks in the index is likely, therefore, to be less than 50; however, CSI points out that even just 30 firms should provide sufficient diversification.

SSE Star Market companies will also be included within the SSE Composite Index – a broad market reference for all stocks traded on the SSE – from 22 January 2020.