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IPOs to resume after a yearlong freeze

2013-12-01 09:02 China Daily Web Editor: Yao Lan

China will resume initial public offerings in January after a freeze lasting longer than a year, and a reform plan on new listings has been carried out to boost the country's stock market over the long term.

A total of 83 Chinese companies completed the examination and received approval from the China Securities Regulatory Commission. About 50 are expected to have finished all IPO procedures and be listed before the end of January 2014. More than 760 companies are in line for approval, and it will take about a year to audit all the applications.

China has not had a new listing since October 2012, when the commission cracked down on fraud and misconduct among advisers.

In the IPO reform plan announced on Saturday, the CSRC will only be responsible for examining applicants' qualifications, leaving investors and the markets to make their own judgments about a company's value and the risks of buying its shares.

Previously, companies aspiring to list on China's stock markets had to undergo a review and approval process, where the CSRC had the sole discretion to decide whether a company was fit to list.

"We want to emphasize the market should not see the registration system as a sign the government won't supervise and regulate the market anymore," said a CSRC official, who refused to be named.

"We will review and make sure the application materials carry appropriate and legitimate information but leave it to investors to decide whether such stocks are worth investing in."

The pricing of new shares has become more market-oriented in that issuers and underwriters can negotiate offering prices according to Chinese law. Pricing information must be released in a statement.

To control prices, the rules state the issuer and underwriter must cancel the highest offer price from investors and 10 percent of the amount of shares offered at that price.

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