The Shanghai Stock Exchange (SSE) was founded as China rebuilt capital markets after decades without a modern exchange. Its creation signaled a shift toward using equity finance to support economic reform and enterprise funding.
SSE started formal operations, reopening a stock exchange in Shanghai for the first time since the mid-20th century. This provided a centralized venue for share trading and helped establish a national framework for listed companies and investors.
The SSE Composite Index was published to track the overall performance of stocks listed on the exchange, including A shares and B shares. Having a broad index helped investors and policymakers measure market trends and risk over time.
China formed the China Securities Regulatory Commission (CSRC) as the main regulator for the securities industry. A dedicated regulator strengthened rules, supervision, and enforcement for exchanges and listed companies.
SSE listed its first B-share, a class of share designed for foreign investors and settled in foreign currency (US dollars in Shanghai). This was an early step toward international participation in China’s onshore equity market.
China launched the Qualified Foreign Institutional Investor (QFII) scheme, allowing licensed foreign institutions to invest in RMB-denominated A-shares and other domestic securities through a controlled quota system. This marked a major change because A-shares had largely been restricted from direct foreign participation.
SSE published the SSE 50 Index, covering 50 large, liquid, and representative stocks listed in Shanghai. The index helped investors follow leading companies and supported the later development of index-linked products.
China launched a pilot program allowing margin trading (borrowing money to buy shares) and short selling (borrowing shares to sell, aiming to buy back cheaper). These tools can improve price discovery but also require stronger risk controls, so the program began with a limited stock list.
Shanghai–Hong Kong Stock Connect began, creating a two-way trading link between SSE and Hong Kong’s exchange through local brokers and clearing systems. The program expanded cross-border access to eligible stocks while keeping capital-account controls in place.
SSE listed its first exchange-traded fund (ETF) options, based on the SSE 50 ETF. Options are contracts giving the right (not the obligation) to buy or sell at a set price, and they can be used for hedging (risk reduction) and more complex trading strategies.
SSE officially launched the Science and Technology Innovation Board (STAR Market) as a new board focused on innovative and high-tech firms. The STAR Market is closely associated with reforms to listing and IPO processes, including a registration-based approach for offerings.
The first 25 companies began trading on the STAR Market, turning the new board from policy design into an operating market. This expanded Shanghai’s role in funding technology-focused firms within China’s domestic capital markets.
Shanghai Stock Exchange (1990–present)