Expanding the U.S.-style IPO mechanism to all corners of China’s stock market will speed up listings and corporate fundraising, as Beijing seeks to revive a COVID-ravaged economy.
The IPO reform is designed “To give the right of choice to the market,” and make IPOs more transparent and predictable, the CSRC said in a statement.
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Under the new system, stock exchanges will vet IPOs with a focus on information disclosure, while the CSRC will only make sure listings are in line with national industrial policy.
The CSRC will consolidate IPO rules for Shanghai, Shenzhen and Beijing bourses.
Under draft rules published on Wednesday for public opinions, no daily trading limit is set for IPO shares during their first five trading days.
“IPOs will accelerate, and the number of listed companies will grow more rapidly,” said Ade Chen, general manager at Guangdong Fund Investment Co. “Bad companies will turn into zombie stocks, and get delisted.”
LInk: https://www.reuters.com/world/china/china-expand-registration-based-ipo-system-2023-02-01/