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Daniel Ren

Beijing has backed a reform plan for the mainland China’s securities market aimed at making it easier for companies to go public.
The China Securities Regulatory Commission will no longer manage the process for initial public offerings. Instead, the stock exchanges in Shanghai and Shenzhen will vet applicants and grant approval.
Beijing will also let the market decide on the price range for share issues, minimising the commission’s role in the process.
READ MORE - China approves strategic emerging industries board, bolster capital market
The reform plan was officially endorsed by the Standing Committee of the National People’s Congress as it ended its bimonthly session in Beijing on Sunday.
The first changes are expected to come into place on March 1, while the entire project is expected to last about two years.
Companies that want to go public will need only register with one of the exchanges and file statements about their earnings and operations. The bourse will review the documents to ensure they are accurate and then give the go-ahead, ideally within a few months.
Such a quick turnaround would greatly benefit companies, especially in fast-changing industries like e-commerce which the government wants to promote as drivers of economic growth.
[It's a] clear message that an eased IPO process will be launched in just a few month
Zhang Qi, Haitong Securities analyst 
Currently, IPO hopefuls can be stuck for half a year or longer as the commission reviews their documents and considers the price range for the shares and the ideal time to list. The Bank of Shanghai for instance, filed for an IPO in 2007 and is still waiting for the commission to grant approval. Such delays are unheard of in the United States, whose approach China wants in part to emulate.
The NPC’s endorsement was a “clear message that an eased IPO process will be launched in just a few months,” said Haitong Securities analyst Zhang Qi. “It shows the authorities determination to help companies raise funds on the stock market.”
The commission will continue to exercise its other duties such as supervising the market, formulating policies and approving new financial products.

Premier Li Keqiang, since taking office in March 2013, has been striving to ease access to funds for small and medium-sized firms, hoping to bolster the national economy on the back of technological innovations.
Beijing temporarily halted IPOs in July, 2015 to stem an influx of fresh equity amid a stock market rout, but it reopened the market after just four months, a sign that the top leaders were resolute in expanding the financing channel for small businesses.
READ MORE - China brokerage stocks hit by news of ‘disappearing’ Citic executives
At that time, the regulator said it would rev up the preparatory work for the registration-based IPO system.
China started considering a reform on the IPO mechanism in early 2012 with former CSRC chairman Guo Shuqing proposing the regulator relinquish its responsibilities in approving new share offerings.
The regulator has long been criticised for its failure to ensure the quality of listed firms.
Yao Gang, a vice chairman of the CSRC who was in charge of IPO approvals, was taken away by the Communist Party’s anti-corruption watchdog for “serious violation of party discipline” in November.
The number of IPO issues by mainland companies around the world this year was 277, 31.3 per cent higher than last year’s total of 211 while the number of IPOs in 2013 was 70, according to Reuters.


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China stock market

Chinese securities regulator to hand over IPO vetting duties to stock exchanges 

An investor takes pictures of an electronic screen showing stock information at a brokerage house in Fuyang, Anhui province, China, December 24, 2015. REUTERS/China Daily ATTENTION EDITORS - THIS PICTURE WAS PROVIDED BY A THIRD PARTY. THIS PICTURE IS DISTRIBUTED EXACTLY AS RECEIVED BY REUTERS, AS A SERVICE TO CLIENTS. CHINA OUT. NO COMMERCIAL OR EDITORIAL SALES IN CHINA.

epa05074341 A handout photo made available by the New York Stock Exchange (NYSE), showing Chairman, Tang Ning, of China-based Yirendai Ltd. on trade floor after ringing the opening bell in New York, USA, 18 December 2015, as executives and guests of China-based Yirendai Ltd. visit the New York Stock Exchange (NYSE) to celebrate their IPO. Yirendai Ltd., a Chinese online peer-to-peer lending company raised 75 million USD on 17 December 2015 in an initial public offering at the NYSE. Yirendai Ltd. is the first such Chinese company than can be traded publicly outside of China. EPA/VALERIE CAVINESS HANDOUT EDITORIAL USE ONLY/NO SALES

Chinese Premier Li Keqiang, since taking office in March 2013, has been striving to widen access to funds for small and medium-sized firms. Photo: Reuters

Chinese securities regulator to hand over IPO vetting duties to stock exchanges

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Legislature approves reform plan that should greatly speed up approval process

Legislature approves reform plan that should greatly speed up approval process