China has announced the launch of a long-awaited growth enterprise board on May 1 as a new direct financing platform for innovative companies.

Companies that seek listing at the new Nasdaq-like second board should have net assets of at least 20 million yuan and be open for business for more than three years, the country's securities regulator said in a set of guidelines that was made public in the small hours Tuesday and take effect on May 1.

The China Securities Regulatory Commission also requires the issuer stay in the black for the recent two consecutive years with combined profits of at least 10 million yuan, or report profits of at least 5 million yuan for the most recent year on revenues of at least 50 million yuan, with annual revenue growth of at least 30 percent in the recent two years.

A CSRC spokesman called the move "an important measure to improve the structure of China's capital market and expand the market's depth and width."

The proposal of establishing a second board was first put forth more than a decade ago. In 2004, a mini second board for small and medium-size enterprises was set up at the Shenzhen Stock Exchange to test the waters.

Small and medium-size enterprises have long been a pillar in China's economy, which has grown to the world's third largest.