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PR Newswire
20-11-2013, 09:32 AM
A small step in the long journey of capital market liberalization in China...
China IPO rules ‘bolster markets, cut red tape’
BEIJING — China’s planned new rules for share sales will boost the role of market forces, China Securities Regulatory Commission (CSRC) Chairman Xiao Gang said, as the government pledges to loosen its control of the world’s second-largest economy.
The switch to a system of registration rather than approval of initial public offerings (IPOs) is the key to all capital-market reforms, Mr Xiao said at a conference in Beijing yesterday. Under the rules, regulators will be responsible only for ensuring companies’ disclosures meet requirements, rather than approving the share sale itself, he said.
His remarks follow a pledge this month by the country’s top leadership to make markets “decisive” in allocating resources, in the biggest expansion of economic reforms since at least the 1990s.
“The capital market is still an administration-led one, and its operation mechanisms aren’t in line with an orientation to supply and demand,” he said. “Prices remain distorted.”
Under current rules for public share sales, the CSRC’s listing committee must examine each application and determine whether a company is fit for listing. The country has not had an IPO since October last year, leaving more than 700 companies awaiting regulatory approval.
The shift to the new system must be gradual to avoid shocks to the market, Mr Xiao said. Before ending the freeze the CSRC is also drafting rules to curb misconduct that would establish stiff penalties for investment banks.
He added that China has no plans to introduce an “international board” for trading shares of foreign companies, because the time is not ripe. BLOOMBERG
http://www.todayonline.com/business/chin...t-red-tape
China IPO rules ‘bolster markets, cut red tape’
BEIJING — China’s planned new rules for share sales will boost the role of market forces, China Securities Regulatory Commission (CSRC) Chairman Xiao Gang said, as the government pledges to loosen its control of the world’s second-largest economy.
The switch to a system of registration rather than approval of initial public offerings (IPOs) is the key to all capital-market reforms, Mr Xiao said at a conference in Beijing yesterday. Under the rules, regulators will be responsible only for ensuring companies’ disclosures meet requirements, rather than approving the share sale itself, he said.
His remarks follow a pledge this month by the country’s top leadership to make markets “decisive” in allocating resources, in the biggest expansion of economic reforms since at least the 1990s.
“The capital market is still an administration-led one, and its operation mechanisms aren’t in line with an orientation to supply and demand,” he said. “Prices remain distorted.”
Under current rules for public share sales, the CSRC’s listing committee must examine each application and determine whether a company is fit for listing. The country has not had an IPO since October last year, leaving more than 700 companies awaiting regulatory approval.
The shift to the new system must be gradual to avoid shocks to the market, Mr Xiao said. Before ending the freeze the CSRC is also drafting rules to curb misconduct that would establish stiff penalties for investment banks.
He added that China has no plans to introduce an “international board” for trading shares of foreign companies, because the time is not ripe. BLOOMBERG
http://www.todayonline.com/business/chin...t-red-tape
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