BEIJING: China rolled out a series of draft rules on Wednesday to broaden the registration-based initial public offering system, which experts said marked a significant leap forward in the country’s capital market reforms.
Expanding the IPO mechanism to all of China’s stock markets will facilitate listings and corporate fundraising, as the economy continues its rebound from COVID-19.
China will focus on “giving the right of choice to the market” in implementing the registration-based reform to better promote high-quality economic development, the China Securities Regulatory Commission, the country’s top securities regulator, said in a statement while publishing 14 sets of draft rules.
Widely used in overseas markets, the registration-based system refers to a stock issuance mechanism that gives the market a decisive role in IPOs and also facilitates the listing of growth-oriented companies.
In the A-share market, the system was piloted on Shanghai’s STAR Market in 2019 and on Shenzhen’s ChiNext in 2020. The Beijing Stock Exchange, which opened in 2021, also adopted the registration-based system. Only the main boards of the Shanghai and Shenzhen exchanges have yet to adopt the mechanism. The CSRC said that all sections of national securities trading venues and all types of public stock offerings will be covered by the registration-based system.
–The Daily Mail-China Daily news exchange item
