Preparatory work on the Shanghai Science and Technology Innovation Board is going on in full swing, with key stakeholders putting in place various procedures, ahead of the official launch later this year, a top regulatory official said on Friday.

Fang Xinghai, deputy head of the China Securities Regulatory Commission, said at a joint meeting with economic professionals at the ongoing two sessions in Beijing that the Shanghai Stock Exchange will complete the application vetting process in under six months, while the CSRC will finish the same in 20 working days. Other stakeholders are also speeding up preparatory work to ensure the quality of participants, he said,

Fang, however, did not offer clues as to when the first company would be listed on the bourse. He said there could be delays in the approval process if companies did not respond efficiently to the CSRC queries.

President Xi Jinping announced in early November that China would launch a science and technology innovation board at the Shanghai Stock Exchange and pilot a registration system for listed companies. Regulations for the new board were released on March 1 and took effect immediately. Companies that have not reported profit yet are allowed to list on the new board as long as they meet one of the five sets of financial indicators.

Fang also stressed that the key issue of the tech board and the registration system is to reform the issuance system to make it more in line with market rules.

"As the securities market becomes more tolerant to companies, the emphasis should be more on information disclosure. In this regard, accounting firms, law firms and securities brokerages should meet their obligations to safeguard the market order," he said.

Michelle Qi, chief investment officer for equities at Eastspring Investments in China, said that medium-sized tech companies with most of their businesses in the Chinese market benefit the most in terms of market value if they can be listed on the new board.

"Before the science and technology innovation board, early-stage startups could only turn to private equity firms for financing. But now, institutional investors are able to fund such companies in the secondary market," Qi said.

"It will be a good opportunity for the A-share market and for investors who missed their chances with companies like Alibaba and Tencent due to the earlier market rules. It was sad that successful domestic innovation companies had not listed their shares in the A-share market till now. Hopefully we may be able to see companies like Meituan Dianping or Pinduoduo on the new board," she said.

UBS Securities estimates that there will be around 50 companies initially on the new board with total financing of about 50 billion yuan ($7.44 billion). Gao Ting, head of China strategy at UBS Securities, said the ultimate goal of the new tech board is to facilitate China's economic transformation.

"It will work as the test field for further reform and innovation of China's capital market," Gao said.

The benchmark Shanghai Composite Index shed 4.4 percent to close at 2969.86 points on Friday while the Shenzhen Component Index dropped 3.25 percent to 9363.72 points.