A Nasdaq-link growth board will likely be launched in the first half of this year, said Shang Fulin, the chairman of the China Securities Regulatory Commission.

China's securities watchdog will also coordinate and develop commodity futures and financial futures steadily, including the long-awaited stock index futures.

"We will push forward the debut of China's growth board to establish a multi-layer capital market," Shang said during the regulator's annual planning meeting.

The growth board can facilitate the development of start-up firms with high potential. It supports the country's national strategy of encouraging self-developed innovation.

Companies are now required to post profits for three consecutive years and generate 30 million yuan (US$4.1 million) in collective earnings during the period before they can trade their shares. The cumulative revenues in the three-year period must reach 300 million yuan.

For the planned growth board, the three-year earnings requirement may be cut to 10 million yuan, according to earlier reports.

The stock index futures, which allows investors to sell short on China's stock market for the first time, will be launched on condition that it won't rock the stock market or cause great volatility to the bourse.

"We will continue to prepare for the launch of the index futures and strengthen the ability to counter risks," said Shang, without specifying a date for the launch.

China's securities watchdog also plans to allow foreign companies and red chips - Chinese companies incorporated overseas and traded in Hong Kong - to sell A shares on the domestic market.

In December during the China-US Strategic Economic Dialogue, China agreed in principle to let qualified foreign firms float their shares on the mainland.

Meanwhile, the commission will continue to encourage financially sound securities firms to seek public share sales to shore up capital and to enhance their corporate governance before the industry is fully opened to foreign participation.

It may allow more brokers to sell asset-backed securities to individual investors this year to boost their sources of revenue.

According to Shang, the market value of the Shanghai and Shenzhen bourses totaled 32.71 trillion yuan by the end of last year.