China’s securities regulators published draft rules on Wednesday to expand the registration-based IPO system.
Previously, IPOs on the main boards needed approval from the China Securities Regulatory Commission (CSRC). With the new system, IPO applications will be vetted by the stock exchanges with a focus on information disclosure, the CSRC will no longer examine the investment value of the candidates, but only make sure listings are in line with national industrial policy.
First adopted by tech-focused STAR Market in 2018, the mechanism was later expanded to the Nasdaq-style ChiNext and the Beijing Stock Exchange. It will now be expanded to the main boards in Shanghai and Shenzhen, CSRC said.
The reform doesn’t mean less stringent quality control, CSRC said. Companies filing for IPOs must meet certain thresholds and information disclosure requirements.
