China Securities Regulatory Commission (CSRC) on Friday approved the merger of the main board and small and medium-enterprise (SME) board of Shenzhen Stock Exchange.

The SME board is geared toward firms with a small equity scale but promising growth potential, which proposes almost the same listing requirements as the mainboard. Both require firms to be profitable for at least three consecutive years.

The operating mode for supervision and business rules governing the two boards are set to be unified, according to Pi Liuyi, deputy director of CSRC's Department of Market Supervision.

The listing requirements, investment threshold and trading mechanism remain unchanged, while the stock code and its abbreviation are merged, Pi added.

As of end-January, 1,468 companies were listed on the mainboard and SME board falling under the Shenzhen bourse, constituting 35 percent of the listed companies in China's A-share market.

The two boards' market value settled at 23.39 trillion yuan ($3.6 trillion), accounting for 29 percent of the entire Chinese stock market.

China has stepped up efforts to shape up a multi-tier capital market that satisfies incremental funding needs from varying companies, with a flurry of measures in place to reform the stock market.