Retail and institutional investors will be allowed to buy at the same time, speeding the listing process China's securities regulator will overhaul the rules governing initial public offerings to make it easier for companies to sell shares simultaneously in the mainland and in Hong Kong. The changes are timed with Industrial and Commercial Bank of China's initial public offering of up to US$21 billion worth of mainland A shares and Hong Kong H shares due as early as next month. 'Some large companies need to carry out dual listings at home and abroad so it is necessary to make the appropriate adjustments to the listing process,' the China Securities Regulatory Commission said on its website on Monday. The key change will for the first time see retail and institutional investors buy shares at the same time, as is done in Hong Kong. Under the old mainland system, the company selling shares and its bankers would first sound out potential institutional investors about their interest in a deal to gauge how much they could fetch for the stock. In the second step, the 'accumulative bidding' or book-building, institutional investors would bid for the shares, enabling the firm and its bankers to set a final price. Retail investors would then be allowed to buy shares at the same price. Simultaneous bidding by individual and institutional investors should cut two days off the mainland initial offering process. The system will be even faster for small and medium-sized enterprises, which will be allowed to skip book-building entirely, trimming the process by four more days and saving the selling company money. Companies selling more than 400 million A shares will also be allowed to exercise overallotment rights, known as 'greenshoe' options, which let underwriters sell additional shares at the original offering price if demand warrants. 'Introducing greenshoe options in the mainland will bring practice into line with Hong Kong, where the market is already very comfortable with this concept,' said Fraser Howie, a co-author of Privatizing China. 'Any improvement to China's [share sale] process should be welcomed but there is still a lot more work to be done to make this a market-driven process.' Even with the changes, there will still be a number of differences between practice in Hong Kong and on the mainland. For example, in contrast to more developed markets, China's securities laws stipulate that 80 per cent of shares sold by smaller-capitalisation companies - those issuing fewer than 400 million shares - and 50 per cent by larger firms must be reserved for retail investors. Mainland rules also require investors to put up the full value of the shares they are seeking to buy, even though they and the bankers know their final share allotment will often be much smaller than they want. Shares are allocated on a pro rata basis should demand exceed supply, as is almost always the case. Frequently, institutional buyers in the end can only buy 1 per cent of the shares they seek. Retail investors must also deposit the full amount for the shares they hope to buy although their allotments are determined through lottery. Analysts say the changes will benefit both markets. 'China follows Hong Kong rather than Hong Kong follows China because Hong Kong's stock market is more mature,' said Kingston Lin, an associate director at Prudential Securities. 'But it doesn't mean the mainland system is bad.'