Examination role a model for mainland
A proposal that calls for the mainland to follow Hong Kong's method of vetting listing applicants for B-share issues emerged at a recent meeting between the China Securities Regulatory Commission (CSRC) and the Shanghai Stock Exchange, sources said.
The proposal will mean that the task of vetting new listings will be handed to the domestic stock exchanges, leaving market watchdog, the CSRC, with a supervisory role.
In Hong Kong, the stock exchange is responsible for examining applicants who want to list, while market watchdog, the Securities and Futures Commission, plays a regulatory and supervisory role.
Analysts said the proposal - albeit a preliminary one which might not come true - highlighted the mainland's concerns to align with international practices.
'There is a growing consensus in the mainland for the securities sector to align with international practices - whether it is the vetting process or the amount of companies going public,' one analyst said.
Analysts said the proposed handover of vetting power to the stock exchanges would lessen the CSRC's day-to-day burdens, making the procedures prompt and more effective.
However, they were convinced the plan would not take shape in the near future.
'A proposal is a proposal. That is something being explored during the meeting. I think it might not be possible for the proposal to become a reality, because it entails quite a big change in the securities sector,' he said.
He said the proposal was more of a reflection of Beijing's struggling attempts to end the fragmented regulatory oversight of its capital market by concentrating powers of industry regulation in the CSRC last year.