China's regulators mull plan to let Shanghai, Shenzhen review IPOs by middle of 2015
Mainland securities regulator considers plan to let stock exchanges vet new listing applications in latest step towards market-based IPO system
The mainland's securities regulator is considering handing over the power of approving initial public offering applications to the Shanghai and Shenzhen stock exchanges this year.
Two sources close to the China Securities Regulatory Commission (CSRC) said it is discussing the proposal to allow the stock exchanges to vet listing applications by June. Though the regulator is yet to endorse the plan, the exchanges are almost certain to start reviewing applications in at least a pilot scheme.
"The reform aims to implement a registration-based IPO system," said Ding Xiaowen, a co-head of the investment banking division of UBS Securities. "Even if it's not implemented this year, it will take effect next year."
CSRC chairman Xiao Gang said all companies should have the right to issue IPOs, pledging a breakthrough this year. Creating a market-based IPO system is understood to be among the regulator's top agenda items.
Analysts predict an IPO bonanza on the A-share market if the regulator starts a trial run of the registration system.
The CSRC has prioritised the IPO reform, under which the existing application-and-approval system would be phased out and replaced by the registration mechanism requiring all listing applicants to fully disclose information about earnings and operations while letting the market decide their worth.