Beijing Exchange Unveils Four Reforms, Targets Liquidity Gap

The Beijing Stock Exchange laid out four reform measures on October 21, marking a deliberate pivot from issuer-friendliness to investor-friendly tools, Chairman Lu Songbin told the 2026 Financial Street Forum Annual Conference.

Lu used his keynote to identify the four workstreams: building a higher-quality cohort of listed companies, rebalancing investment and financing, sharpening the National Equities Exchange and Quotations (NEEQ) as a feeder market, and deepening coordination with ministries and capital partners.

Why the BSE is finally chasing the buy side

The exchange's most pressing problem isn't a shortage of companies. It's a shortage of buyers. Lu pointed to a structural gap the BSE has carried since its 2021 opening: financing tools have outrun investment tools, leaving what officials bluntly call "more financing, less investment" — the root of the liquidity shortfall.

He's attacking it on three tracks. First, the BSE will advance market-cap-based allocation for new share issuance, a mechanism that ties how shares get distributed to a company's market value rather than a single book-building round. Second, the exchange wants more book-building cases to surface fair pricing. Third, the BSE 50 ETF, a flagship index fund tracking the exchange's top 50 names, moves closer to launch.

The investor base isn't empty. Lu disclosed that qualified investors have hit nearly 11.7 million, triple the count at opening, and more than 3,000 mutual funds now hold BSE stocks. The 50 ETF, he implied, is the bridge that pulls pension and social-security money onto the board.

What does the BSE 50 ETF actually change for traders and issuers?

Practically speaking, an index fund gives portfolio managers a one-ticket way to take BSE exposure without picking names. For issuers, it creates a passive bid that anchors valuation. CSRC Chairman Wu Qing confirmed the regulator's backing on October 19 at the forum's opening ceremony, listing the BSE 50 ETF alongside market-cap allocation, innovative evaluation standards and optimized NEEQ tiered management as the year's marquee measures.

Shang Qingjun, a first-level inspector at the CSRC's public company supervision department, added that the regulator will step up investment-side development and coordinate primary and secondary markets so pricing reflects both new supply and existing holders.

Setting its own entry bar, not borrowing one

The BSE's second workstream rewrites how the exchange decides who belongs. New innovative evaluation standards will screen emerging and future industries, reward M&A and refinancing by quality companies, and let the BSE judge "innovativeness" on its own terms rather than relying solely on the government's specialized, refined, distinctive and innovative (SRDI) labels.

The market's current shape gives the policy something to bite into. The BSE has 351 listed companies; SMEs make up more than 70%, private firms near 90%, strategic emerging industries more than 80%, and national-level "little giant" SRDI winners more than 60%. Among companies listed since 2025, little giants approach 80%. Lu also pledged tighter fraud enforcement and sharper constraints on "key minority" actors — controlling shareholders, executives and others with outsized influence.

NEEQ as the on-ramp, not just a sandbox

Lu framed the NEEQ overhaul as a move from "nurturing seedlings" to "nurturing good seedlings." Tiered management will get a fresh pass, with differentiated disclosure rules, better incentives for market makers, and a green channel letting quality fourth-board companies list on the BSE without redoing the full review.

The pipeline numbers explain the stakes. NEEQ has cumulatively served 14,000 SMEs and delivered more than 600 billion yuan (about $89.9 billion) in total financing. It has fed roughly 850 companies to the Shanghai, Shenzhen and Beijing exchanges, and 200-plus fourth-board firms have already used the green channel. More than 400 NEEQ-listed companies have drawn private placements from PE and VC firms totaling over 26 billion yuan (about $3.9 billion). Ninety percent of BSE-listed companies carry venture capital on their cap table, with an average of four VC backers each.

Does the coordination piece move the needle on its own?

The fourth workstream is bureaucratic plumbing, but it carries weight. The BSE will deepen links with the Ministry of Industry and Information Technology, the National Development and Reform Commission and the Ministry of Science and Technology, push the Beijing-Tianjin-Hebei service mechanism, and engage industrial funds, PE, securities firms and banks. At the forum, the BSE, NEEQ and the MIIT's SME Development Promotion Center jointly launched the "BSE and NEEQ Service Zone" to channel policy and capital directly to SMEs.

Whether scale becomes liquidity is the open question. Wu Qing's five-year scorecard is striking: BSE-listed companies and total market cap have grown more than threefold from opening, and turnover has climbed nearly tenfold. If the BSE 50 ETF launches on schedule and market-cap allocation lands as drafted, the exchange that opened five years ago as an SME gateway will spend 2026 testing whether it can also become a place where long-term money wants to stay.