Jun 20, 2017 01:45 PM

Editorial: IPO Reform a Litmus Test for Regulators

As investors await a decision on June 20 by index provider MSCI Inc. on whether it will add mainland Chinese shares to its MSCI Emerging Markets Index — a move that could draw billions of dollars into China — another debate on how to fine-tune the mainland’s share issuance system threatens to cast a long shadow over markets. The discussion focuses on whether the securities regulator should suspend initial public offerings (IPOs) to squeeze supply and push up share prices. So far, the China Securities Regulatory Commission (CSRC) has only reduced the number of new share issuances approved each week, instead of halting IPOs, a drastic measure they had resorted to in the past.

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