The first national regulations governing mainland companies issuing shares on Hong Kong's forthcoming Growth Enterprise Market (GEM) have been released. The guidelines issued by the China Securities Regulatory Commission (CSRC) yesterday lay the regulatory framework on vetting and approving mainland companies for GEM listings. The code, resembling 1994's H-share regulations governing mainland companies issuing shares on SAR's main board, details the key criteria for GEM listings, documents to be prepared and, in great length, the vetting procedures. Priority would go to high-technology companies with Ministry of Science and Technology verification, Xinhua news agency said yesterday. Listing candidates that meet GEM listing requirements can seek CSRC approvals through their sponsors. Previously, they were recommended by the relevant ministries and authorities. The CSRC will vet the applicants on a case-by-case basis, with the process taking about 30 days before an approved applicant can apply to the Stock Exchange of Hong Kong for a GEM listing, according to the guidelines. The code, establishing the authority of the CSRC in the initial vetting procedures, appears to be contrary to market expectations that the CSRC would take a passive role in the process. Securities and Futures Commission deputy chairman Laura Cha Shih May-lung, asked why the CSRC gave less than expected latitude to listing applicants in the new guidelines, said: 'We can't tell others what to do.' Mrs Cha said the commission would talk with the CSRC on the issue next month. Hundreds of mainland companies, mostly private firms in technology industries or with a hi-tech focus, are gearing up for GEM listings. Key criteria of the new guidelines are: Companies are to be restructured into shareholding companies under the blessings of provincial authorities or the State Economic and Trade Commission. Companies and their founders must have no record of major illegal activities and rule violations over the two years prior to the application. Documents to be submitted to the CSRC must include a feasibility study and underwriting report prepared by the listing sponsors, as well as audited reports prepared according to mainland and international accounting standards. Three months prior to filing applications to SAR's stock exchange, listing candidates have to submit the documents' copies to the CSRC, the relevant local authorities and ministries. Listing applicants will receive CSRC confirmation of acceptance or rejection in writing in 20 days of submitting applications. Reasons will be stated for rejection.