China Will Broaden Use of Streamlined IPOs Tested on STAR Market
China vowed to broaden the adoption of registration-based initial public offerings (IPOs) as a key task in deepening and strengthening the nation’s capital markets.
In a two-day meeting that concluded Tuesday, the China Securities Regulatory Commission (CSRC) unveiled 12 current and future priorities for advancing capital market restructuring.
At the top of the list is giving full play to the role of the newly launched Nasdaq-style tech board in Shanghai as “an experimental field” and steadily implementing the registration-based IPO system, which is now applied only on this board, the commission said.
The market has been expecting an expansion of the registration-based IPO system to Shenzhen’s ChiNext board for growth enterprises after Shanghai’s new STAR Market adopted the system, which simplifies the lengthy approval process that companies now must go through before floating shares on the mainland market.
The regulator called for vigorously improving the quality of listed companies by “guarding both the entrance and the exit.”
The reforms will support pilot programs for allowing publicly traded companies to spin off and list units, the CSRC said. The commission will accelerate high-level opening-up of the capital market, the regulator said without elaborating on specific measures.
Other tasks include bringing more long- and medium-term capital into the market through measures such as allowing mutual funds to be included in the investment scope of individual tax-deferred commercial pension funds.
The regulator also pledged to speed up the revision of securities law and to establish a system with so-called Chinese characteristics for securities class action lawsuits, aiming to significantly raise the costs that publicly traded companies will face for engaging in fraudulent listings, insider trading, market manipulation and false information disclosures.
Contact reporter Denise Jia (firstname.lastname@example.org)
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