Regulator reforms China’s IPO process, leaving share pricing to market forces, with bourses to vet disclosures

Reform will ‘give the right of choice to the market’ and make IPOs more transparent, the China Securities Regulatory Commission says

The new registration-based system, based on US models, reflects Beijing’s intention to further internationalise China’s capital market

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A view of the China Securities Regulatory Commission (CSRC) office building in Beijing. Photo: Simon Song

Published: 6:30am, 2 Feb 2023

China’s securities regulator will fully relinquish its role in reviewing initial public offerings (IPOs), transferring the vetting power to the stock exchanges while giving market forces full sway over share pricing.

The China Securities Regulatory Commission (CSRC) said in a statement after the market close on Wednesday that a registration-based IPO system would be implemented at all the stock exchanges in Shanghai, Beijing and Shenzhen.

Currently the regulator is responsible for reviewing listing documents and has a final say in share pricing.

The IPO reform is designed “to give the right of choice to the market,” and make IPOs more transparent and predictable, the statement said.

The Shanghai Composite Index and the Shenzhen Component Index are displayed on a stock ticker in Pudong’s Lujiazui Financial District in Shanghai on January 30, 2023. Photo: Bloomberg

The CSRC published draft rules governing the eased IPO mechanism and is soliciting public opinions until February 16.

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